Outsourcing non-core activities like back-office operations or administration frees up your resource helping you to FOCUS ON THE CORE FUNCTIONS of the business, rather than supporting ones.
When it comes to Payroll Management many business owners feel disinterested and not able to manage its payroll accurately due to complicated procedure that requires continuously attention to detail and compliance with government regulations. When you hired your first employee, payroll responsibilities will start from day one and it is continue in every pay period. The complexities of payroll processing require a significant time commitment on a daily, weekly and monthly basis whether it’s checking employee attendance, leave details, processing salary, generation of various reports, preparing and remitting various payroll taxes and returns. To complete the above work you need to spend more time in processing of salary.
Below are the few reasons to outsource your payroll:
- Setting up Incorrect Salary Structure
- Payroll is complicated, especially where taxes are concerned.
- Taxes are most important part of any payroll but they are difficult to understand and are subject to change every year.
- If you’re preparing salary structure yourself, you want to make sure that you have included all relevant components and proper deductions have been made in terms of PF, ESI, TDS etc
- Sometimes you need to include various state wise taxes as well like Professional Tax, Labour Welfare Fund etc in employees salary structure therefore you can outsource your payroll to a company to handle for you.
- Being Late with Salary Transfer
- Sometimes business owners are busy, and they are busy in multiple works, especially in case of small business that have responsibility of everything and owner is processing salary himself. That’s why it’s very common for business owners to forget payday. This is not good for any organization and the people working in that organization.
- The efficient way to handle this problem is to consider hiring someone or outsource your payroll so you don’t forget. When you do this, you can concentrate on the core activities your business and let someone else handle the payroll.
- Delay or Missing in Tax Payments
- Many businesses are facing this problem. Sometimes there is delay in tax payments and sometimes it is missed by the business owners.
- There are different tax payments having different due dates. It can be monthly, quarterly, 6 monthly and in few cases it is yearly.
- If you delayed or missed the tax payments then penalties are huge
- Late payments of taxes not incur only penalties, but they can incur interest as well.
- Poor Record-keeping
Poor Record-Keeping is a major challenge for all the companies. It is the duty of the business owner to manage the lot of different records from tax records to accounting records. If you not maintained the payroll records properly than it is always difficult to handle the department notices and queries going forward.
The Company is required to maintain followings records:
- Employees Full Details like: Name, Code, KYC, PF Number etc
- Attendance Records
- Leave Records
- Salary Sheet
- Employees assets records
- Employees Reimbursement
- Employees Investment Proofs etc
- TDS, PF, ESIC and other labour laws related records i.e. Challans and Returns etc.
- Paying the Wrong Amount
- When you don’t have time than salary is always process in hurry or at last minute and some time wrong salary processed. Sometimes it’s happen because of clerical error and sometimes the wrong input entered by the employees.
- In that case you must have a proper payroll system is place where you can double check the amount before making payment to employees. Double check payroll amounts as well as tax withholding amounts in each payroll period so you don’t end up with a mess later on.
- Missing Company Holidays
This is the main common problem with many startups.
You don’t want to miss company holidays, because if you do, your employees will suffer.
For example, if payday falls on a Friday, and that day is a company holiday, you want to make arrangements to pay your staff the day before.
Remember that company holidays aren’t considered business days when it comes to processing your payroll. Always be aware of company holiday so you can adjust your payroll processing time.
- Mis-classification of Employees
- Many Companies now a day’s employ part-time, hourly workers, full-time salary workers, freelance contractors, or temporary and seasonal employees.
- It’s always tricky to know who to pay what amount and for which employee withholding tax is to be deducted.
- Incorrect Overtime Amounts
- This is another common problem i.e. missing the overtime.
- In some cases you are required to pay overtime for certain categories of employees.
- Sometimes it causes problems for employers and employees for calculating these amounts.
- A payroll professional can help you in navigate the sticky subject of overtime hours.
Conclusion
Outsourcing payroll can be a great way to ensure that your business runs smoothly and efficiently. Outsourcing payroll with IBSOL allows you to focus on running your business, while they take care of the tedious task of managing payroll and tax compliance. Their team of experts are knowledgeable in their field and provide professional services for a variety of businesses, big and small. With their reliable service and competitive prices, IBSOL is an ideal choice for those wanting to streamline their payroll processes.
