Benefits of Outsourcing Payroll
Payroll – Benefits of Outsourcing
The payroll is an integral part of every business and maintaining it and keeping it up to date is primary importance. However, very often, this is a time consuming task and requires plenty of attention, while ensuring all statutory regulations are abided with and all calculations are accurate and payments made on time. In Singapore, the rights and duties of an employee under a contract of service with an employer are outlined in the Employment Act. The only ones exempted are seamen, domestic workers, civil servants and those in managerial and executive positions.The Act is amended regularly following public consultations and in the recent amendment – April 1, 2016 – all employers are required to make and keep employee records, give written records of key employment terms (KETs) and give itemised pay slips to employees. Breaches of the requirements could result in heavy penalties. With all these requirements and procedures, small businesses often have no choice but to outsource their payroll processing. By outsourcing to a knowledgeable, reputable and professional payroll vendor, you not only save time, but also reduce overhead costs and get access to the required expertise and technology.
Save Time and Reduce Overheads
Regardless of the number of employees, salaries must be paid on time. By outsourcing, all an employer has to do is contact the outsourced payroll specialist or vendor when the time comes for approval. By doing this, there is no need to waste manpower which could affect the core functions of the company. Outsourcing payroll can help with cutting costs and limiting risks. By engaging a payroll specialist who understands employment and tax laws, you can ensure there are no breaches of Employment Act requirement or late, incorrect filings etc. These can often lead to unnecessary penalties. Payroll service providers have numerous plans to suit your needs and you will be surprised how much you can save by outsourcing payroll. For companies that do their payroll processing in-house, payroll becomes a money burner.
Ensures Confidentiality & Provides Access to Expertise
Managing payroll externally maximises confidentiality, prevent misunderstandings and minimise disputes at the workplace. Outsourcing your payroll also limits the risks of having your in-house human resources or accounting personnel leak salary information they have access to. Also, most likely,owners and payroll-related staff would not have time to constantly study and keep up with amendments to regulations.There are numerous tasks which must be done by an employer, for example, they have to prepare wage reports and tax forms, keep records of all employees’ income and deductions, pay monthly to the Central Provident Fund (CPF) and Skills Development Fund (SDF) on behalf of their employees and provide paid annual leave. There are a huge amount of complex nuances and deadlines one has to keep track of. By outsourcing payroll, a small business can take advantage of the expertise provided by the team of external payroll specialists. Also, employees these days want access their payslips, time-sheet, leave management and claims independently. Similarly, managers would appreciate the capability to approve leaves, claims, and time-sheets via a payroll system. Employers that are not able to provide such options may be left disadvantaged.
By outsourcing to a reliable service provider, you can also enhance data security. These days, most payroll service providers and vendors incorporate technology that can spot and alert you to possible payroll fraud. In addition, such providers typically invest in state-of-the-art systems for storing and protecting data. Besides possibly incurring penalties for errors, omissions or late payroll tax filings, you are also legally responsible for any cases of misrepresentation or failure to file accurately with statutory agencies. Professional payroll providers stay abreast of rules, regulations, and changes in employment and tax policies and guarantee compliance and accuracy. Also, if there are mistakes, a good payroll services provider will assume the cost of penalties and handle the liabilities. So, overall, the benefits of outsourcing are obvious. With the peace of mind that outsourcing payroll services bring you, you can truly focus on growing your business.