If your business grows to a hundred — or even a thousand — employees, can you or your in-house accounting team still manage your payroll effectively? Hiring an extra person can be an option to handle your growing payroll duties, but outsourcing offers a more time- and cost-efficient solution. Here are some of the benefits of payroll outsourcing and why you should consider it. 

benefits of payroll outsourcing

Payroll outsourcing is the practice of subcontracting your payroll duties to a specialised service provider. Outsourced payroll services range from the calculation of your employees’ wages to the remittance of PAYG and payroll taxes. However, it still depends on you whether you’d like to outsource only a portion or your entire payroll function. What it guarantees is if you work with the right service provider, it can be a strategic solution to your resource-related concerns. 

 

Benefits of payroll outsourcing 

Are you wondering if payroll outsourcing is beneficial for your business? Here are the main reasons to outsource your payroll: 

 

  1. Work with in-demand payroll specialists

If you’re dealing with skills shortages, and your recruitment team has a tough time filling in the talent gaps in your organisation, outsourcing has your back. 

Outsourcing companies, especially those that specialise in accounting, employ the top talents in the industry. They’re also led by experienced finance and accounting professionals. This equips them with an extensive understanding of the diverse types of accounting, as well as the various accounting and business regulations in Australia. 

In some cases, specialised accounting outsourcing companies already have an existing team who are ready to take over your payroll duties — giving you the option to onboard faster. Otherwise, they assume the responsibility of sourcing, recruiting, hiring and training the payroll specialist you’re looking for. 

 

  1. Save your in-house accountants from repetitive and time-consuming tasks

Outsourcing increases the capacity of your in-house accounting department. By delegating this time-consuming task to specialised providers, your accountants can focus on other value-generating activities such as data analysis, financial forecasting and budget planning. 

 

  1. Gain access to the latest payroll systems

Instead of investing in a payroll system, you can take advantage of the existing payroll systems of your chosen company. Take note, though, to work with an outsourcing company that uses software with Single Touch Payroll (STP) capabilities. This way, you can stay compliant with the regulations set by the Australian Taxation Office (ATO). 

 

Related: What Are the Changes in Payroll Reporting Through STP? 

 

  1. Stay compliant with state and federal payroll legislation

The payroll legislation in Australia is complex. Aside from STP reporting, you also need to consider your payroll tax duties, your employees’ superannuation contributions, PAYG withholding obligations and other state and federal compliance requirements. 

Hiring an outsourced payroll specialist who has a deep knowledge of how the payroll legislation in Australia works can be your best bet to stay compliant. 

 

  1. Reduce overhead costs

Outsourcing your payroll is a sustainable option to cut down unnecessary costs through the following ways: 

  • Recruitment,as your outsourced partner can handle this process on your behalf.
  • Payroll systemssince most outsourcing companies already have existing systems in place.
  • Office space and equipmentbecause you no longer need to invest in extra space or buy new equipment for in-house staff. Both will be provided by your chosen service provider.

Payroll outsourcing services are also flexible and scalable — it lets you start with a single staff and increase it later as your business needs grow. Depending on the amount and complexity of the tasks you’ll outsource, you’ll have the option to outsource a full-time, part-time or project-based role. In other words, you’ll only need to pay for what you need. 

 

  1. Facilitate better business continuity

One of the benefits of payroll outsourcing is its ability to resume business operations despite unforeseen events. The sudden absence of your in-house employee, for instance, can cause delays in your payroll. But with a reliable outsourcing company, such incidents can be avoided, thanks to the support provided by a backup employee. 

 

Work with the right payroll outsourcing service provider 

The success of outsourcing your payroll depends on the decisions you’ll make. To get positive results, it’s essential to pick the right service provider right from the start.  

If you’re looking for a reliable payroll outsourcing provider, consider ABJ Solutions. We’re an Australian-based company that is led by chief financial officers and accountants, giving us extensive knowledge of different state and federal accounting rules and regulations.  

If you’re interested in knowing more about our services, contact us today. Our lines are always open to answer your questions.