Benefits of Outsourcing Payroll               

Have you been thinking about outsourcing Payroll? Sometimes it can be a hard decision to make. In this articles we have outlined a few of the benefits of outsourcing Payroll. Hopefully it will help you make the decision.

The most important reasons why most of the companies are using payroll outsourcing are:

1. 1.Free Up Your Time: Payroll processing preparing by hand is a time consuming process . Outsourcing finance can free up staff time to pursue more essential worth included and income producing activities.
2. 2.Reduces Costs: The direct costs of processing payroll can be significantly reduced by working with payroll provider. Researches have shown that a small business with 10 employees will typically spend $2,600 per year in direct labor costs associated with payroll.
3.  Alleviate Pain
   Manual payroll is a headache in the best case and a nightmare in the worst case. Business owners who outsource payroll eliminate a tiresome source of personal pain.
4. Maintain a strategic distance from Technology Headaches: A steady question for small entrepreneurs is whether they have the most recent version of their payroll software and the latest tax tables introduced on their PC. Utilising the wrong tax tables can bring about hardened punishments. Outsourcing payroll removes those headaches and keeps payroll running smoothly.
5. Leverage Outside Payroll Expertise: Most business owners and controllers don't have time to keep up with constantly changing regulations, withholding rates, and government forms. By outsourcing payroll, a small business can take advantage of expertise that was previously available only to big companies.
6. Avoid Payroll Knowledge walking Out the Door: If your bookkeeper or controller gets a new job, they will walk out the door with their knowledge of the payroll process and how you do it. Using an outside service eliminates that business risk

If you want to discuss it further or have queries about it, please give us a call at 1300 488 330 and our professional will be happy to have a chat to you about it.

How to Use a Payroll Service Provider

 Payroll service providers are a big deal for small business – an estimated of 42% of Australians small business use them.

The services offered by PSPs range from payroll processing to taking custody of an employer’s payroll cash.  Payroll processing incorporates computing employee’s gross pay, withholdings, and net pay; printing payroll checks (for workers not choosing direct deposit); preparing payroll reports for administration and get ready for payroll tax returns. PSPs make important expertise available to employers unable to develop it on their own. PSPs taking authority of employer’s payroll cash accept responsibility  regarding paying for paying taxes on employees ' wages, and for paying net pay to workers. Professional employer organisations ("PEOs") go further and indicate to hire an employer’s employees and lease them back to their recent employers. PEOs expect responsibility for paying workers' net pay and all payroll taxes, and for subsidising all representative advantages .The issue is that a PSP taking custody of employers’ payroll cash may not utilise it for its planned reason. Workers must be paid their net wages, as surely they will be heard from if they are not. But the taxing authorities are not at the PSP’s door demanding remittance of payroll taxes. The PSP principals can steal the assets reserved for payroll taxes, maybe covering them later with different amounts withheld from workers' wages. The taxing authorities will eventually demand payment of payroll taxes. When they do the business may need to pay the assessments a second time. Indeed, even a business utilising a PEO is not free, as taxing authorities may regard a purported lessee as employees’ true employer. An employer should never allow a PSP to take custody of its payroll cash. The employer should maintain custody of its payroll cash subsidising the payroll bank balance, making direct deposits of net pay to employees’ bank accounts, distributing payroll checks to employees not choosing the direct deposit option, and transmitting all payroll taxes. On the off chance that the business does not set up its finance government forms, it ought to audit the PSP-arranged returns, accommodate them to its books, sign them, and document them .After receiving account bank statements, an employer should accommodate them to its books, instantly advising the depositary bank of any forged or altered checks Under the law of most states client can't hold a depositary bank subject for paying a forged for altered check unless the client advises the bank of the defalcation "inside a sensible timeframe, not surpassing 30 days," after the client first gets a bank statement reporting it.

In sum, computing employees’ gross pay and withholdings, printing payroll checks, preparing payroll reports, and preparing payroll tax returns are appropriate uses of a PSP. But an employer should never allow a PSP to take custody of its payroll cash.

To discuss it further call Absolute Accounting Solutions at 1300 488 330