Why Right Now Is The Best Time To Outsource Your Payroll Management
With global markets reeling, business continuity plans are being tested like never before. At the moment, a major concern for business owners is how to enhance their resilience and sustainability, because, despite the current inhibitive business environment, there are areas in which no reputable company should ever drop the ball. One of such areas is payroll management, which informs why conventional thinking is leaning more towards outsourcing this crucial aspect of the business to experts.
While payroll is essentially a back-end process, it is critical to the smooth running of a business. If employees’ entitlements and emoluments are not attended to on time and correctly, employers are left with a disgruntled workforce, which would lead to depleted staff morale and, subsequently, poor customer satisfaction. Then again, one major thing that could predispose a business to penalties, potential litigation and even stress from the government and regulatory authorities is non-compliance and adherence to applicable laws when it comes to taxes, pension and other regulatory requirements.
Thus, if a business keeps mishandling their tax and pension issues, it will lead to massive ripple effects on other business processes and inevitably impact revenue and even business growth. Beyond that, even where there seems to be in-house capacity for the handling of taxes and pension within an organization, in the face of current global realities, more and more business leaders are strategically thinking on how to focus on the core of their business in other to achieve more.
Given the current global crisis, the need to keep payroll running as efficiently as possible, especially concerning proper calculations, time and money savings and liaison with the right government agencies, cannot be overemphasized. And so, with the prevailing economic headwinds and the social trajectory the world has been locked into, now may be the best time to outsource your payroll management. Here, we explore two compelling body of thoughts that lend further credence to this.
The New Normal in Business
The much-heralded “new normal” is a reflection of the responses by forward thinking entrepreneurs to new emergent realities in society and the world of business.
Businesses have switched to using remote technology to meet deadlines due to social distancing protocols. Employees are now distributed across locations and utilize video conferencing software and cloud computing solutions to communicate and collaborate, ensuring their departmental deliverables are met. However, this transition happened “overnight” and there’s a steep learning curve that is impacting on operational efficiency. There are also emerging cyber security issues due to remote access of proprietary company and employee data. These are conditions experts agree will persist indefinitely and therefore advice entrepreneurs and business leaders to adjust to.
Regardless of these disruptions, or rather, amid these disruptions, tax and pension issues must still be competently and efficiently handled.
Payroll administration has always been a time-consuming process. Today, amid the current economic disruption and downturn, tax and pension processing can be downright laborious. As the office becomes more and more decentralized, outsourcing your payroll administration to a competent payroll management service provider saves you time and money, lessens your distractions and your burden (including the number of moving pieces you have to monitor and control), and frees you to focus on your strengths as an entrepreneur or business leader – helping you navigate your business safely through the throes of a recession, amid disruptions to supply chains, revenue streams etc. This is a necessary strategic decision that will ensure business survival.
Payroll management has a direct impact on an organization’s net income since it is connected with how well taxes and pensions are computed, as well as how much is disbursed to employees and relevant tax agencies.
If you fail to comply or adhere to applicable laws and regulations, you risk being penalized. On the other hand, if you overpay, you would be throwing away your hard earned revenue.
Further complicating the plot, government is responding to the global economic crisis with new policies every other month in an attempt to stymie the impact of the decline in economic activity over the past couple of months. Astute entrepreneurs and business leaders are aware that the business environment is currently volatile and are actively seeking out avenues to optimize their resources and opportunities.
Business environment volatility has also directly impacted on labor with more cases of employee work-time reduction, forced leave, termination of contract staff, and other downsizing/cost cutting strategies. The accompanying government interventions to mitigate job losses are also influencing payroll management and compliance.
Take for example, the 2020 Emergency Economic Stimulus Bill, which offers a 50% income tax rebate to employers and companies. The rebate comes with conditions that the employer must fulfill to remain eligible. Doing the necessary evaluation and adjustments to remain eligible for such interventions are just one of the many ways payroll processing has been further complicated in this era.
In the past, saving time was the core motivation for companies to move to an outsourced solution. Today, asides the time saving benefits, outsourcing also enhances transparency, ensuring companies comply with ever evolving regulations, and enhancing confidentiality efforts.
Payroll management service providers are proactively monitoring regulatory updates and maintaining a comprehensive inventory of laws and statutory regulations that affect taxes, pensions and other regulatory issues. This inventory enables them to deliver payroll management services that comply with all applicable regulations.
This is why outsourcing your payroll processing comes highly recommended.
It is not only a timely response to the current prevailing conditions, it is a business sustainability move that would help companies optimize resources and opportunities, positioning them to thrive in the months ahead.
Judging from the foregoing, every worthwhile company must prepare for potential contingencies and risks to mitigate the impact of current disruptions to business activities. In the case of tax and pension processing, the current economic environment should serve as a reminder that optimizing your processes is not a nice-to-have, but a pillar of survival.
Investing in a competent and reputable payroll management service provider is one of such optimizations as it would reduce the burden of evaluating employee salaries, benefits, taxes and pensions, and also ensure timely compliance and adherence to applicable laws. This is particularly so at this period when core business areas are demanding more direct attention and strategic input.
Employers would benefit from the realization that outsourcing the handling of their tax and pension issues is a strategic business continuity plan and could be the key to enhancing business resilience.
Engaging the services of an innovative payroll management service provider that could easily liaise with the right agencies of government and stop you from falling prey, one flexible enough to adapt to a dynamic business environment, while still ensuring the smooth delivery of standard payroll procedures, is a decision that will pay dividends in the long run.
While the economic downturn may leave business owners feeling like the rug has been pulled from under them, knowing that certain aspects of your business, like payroll administration, can be outsourced to a competent industry expert gives the necessary assurance required to adapt and thrive in today’s business environment.