A payroll is a company's list of its employees, but the term is commonly used to refer to: the total amount of money that a company pays to its employees. a company's records of its employees' salaries and wages, bonuses, and withheld taxes. the company's department that calculates and pays these. (Source: Wikipedia)
Payroll processing consist of calculation of payments to employees for their work in the company - whether it is based on time or productivity, calculation of benefits, and statutory deductions. IT needs to be processed by each company periodically, usually processed every month or in some cases on a daily basis. Payroll is a complicated process that varies from company to company.
Need for Payroll services
There’s no doubt that tackling payroll presents serious challenges to businesses of all sizes. Handling time and attendance, payroll taxes and workers’ compensation can be difficult for even the most experienced business leaders. Choosing the best payroll service for your needs can help you save your time and money. A good payroll service will pay employees and file and pay payroll taxes. Payroll preparation services have a natural advantage over an internal team in providing quality service. There are also other important factors such as access to advanced payroll technologies, expertise, and volumes that need to be considered while deciding whether or not to outsource these services.
Why do companies outsource payroll services?
Payroll outsourcing companies come into the picture to reduce and take the stress out of payroll and related processes by providing Internet-based, intuitive services to companies of all sizes and in all industries. Savings in time and money, greater data security and the comfort of knowing experts are handling your payroll functions, are some of the compelling reasons for companies to consider outsourcing their payroll processes.
Focus on core expertise:
Regardless of the number of people employed by your business, attending to payroll demands a great deal of time and attention to detail. Leveraging the expertise of a payroll company can alleviate the time-consuming process of having your employees managing payroll. Outsourcing can free your staff's time to pursue more important value-added and revenue-generating activities. Because payroll management is a time-consuming activity, removing this burden can allow your employees to focus on more productive items within their realm of expertise. Outsourcing this function immediately frees up precious time.
Less scope for mistakes:
Payroll mistakes can be painful, upsetting and stressful. A good payroll service provider is far less likely to make a serious error than your in-house staff, as you are paying them for their expertise, knowledge and finely-tuned checking procedures they have in place. A professional payroll provider employs individuals who know payroll processing inside and out. These individuals specialize in the complexities of payroll taxes, as well as compliance with government regulations. It's what they're trained to do and part of the guaranteed service they provide.
Payroll companies can customize and offer small and medium sized business total payroll packages in which all their payroll requirements can be met. With outsourced solutions, these packages are often flexible to meet their specific business model so they don’t end up paying for something that includes services they don’t need or misses key features that they do need.
Safe and secure:
Many do not have the time and energy to closely supervise your business’s payroll for time and rate abuses and other shady activities. Payroll outsourcing companies offer a high level of security for your confidential payroll data. Most payroll companies have technologies that can spot and alert clients to various types of payroll fraud, such as payment manipulation and ‘phantom workers’. In addition to redundant backup and multiple server locations, a quality payroll provider invests in state-of-the-art systems for storing and protecting data, simply because it's part of the service provided to clients.
Drafting and finalizing financial reports for your small business is also extremely time-consuming. Many outsource providers offer a variety of report services, including timesheets, expenses, etc. This helps you to keep detailed records of your company’s financial history.
Cost of payroll services
Cost of payroll services will depend on the type of services that a company wants to avail, number of employees, regulations and compliances for the industry according to the state it operates and a few other factors such as size of the organisation, etc. The type of services could vary from the basic monthly payroll processing to other processes such as PF, Profession Tax, ESIS, returns filing, Full & Final settlements, Investment proof checking and auditing, Form 16 generation, etc. These activities are conducted on a monthly or annual basis so that too needs to be considered while determining the cost of payroll services in India.