Who Can Benefit From Outsourcing Payroll?

outsourcing payroll

outsourcing payroll

Outsourcing payroll functions is an excellent option for companies that want to operate more efficiently and at a reduced cost. If you are interested in pursuing this as an alternative to an in-house HR department, this list may help you determine whether your business needs will be best served by outsourcing your payroll.

1. Your Managers Are Overworked

Tracking and adding up hours worked can be a laborious task, especially for companies that employ a significant number of non-exempt (that is, hourly) employees. This likely also takes time and energy away from core business functions, which can lead to overworked managers and reduced company productivity. Outsourcing your payroll needs will lift this burden from the shoulders of your in-house managers so that they can focus on building the company instead of counting hours.

2. You Have a Small and/or Expanding Business

Ambitious companies need financial stability to support their innovations and ideas for growth. The more that goes into these efforts, the better chance they have of succeeding. Using an outside payroll service provider reduces the costs associated with processing checks and dealing with details like income tax withholding and wage garnishments, and the money saved can be put toward business expansion.

3. You Are Worried About Tax Issues

IRS audits and penalties are an ongoing concern for businesses. Two out of five small businesses are required to pay a tax penalty every year for filing errors or late submissions, at an average of $845 each. Because most payroll services offer tax guarantees, outsourcing provides business owners with valuable peace of mind and assurances that they will not have to deal with such penalties.

4. You Want to Run Your Company More Efficiently

In theory, direct deposit is a great idea. The money appears automatically in employees’ accounts, and it eliminates the human errors caused by manually issuing individual checks every pay period. While this sounds like it would be easier for both employees and employers, in actuality, this can be quite a difficult undertaking unless a company uses an outsourced payroll service. Employing an HR company can also carry added benefits; according to frankcrum.com, payroll services can provide multiple options for employees to receive their paychecks, including printed checks, direct deposit, and Visa cash cards. Your employees may welcome these flexible options.

5. You Are Cautious of Expensive Technology Solutions

There are many benefits to employing payroll software, but they also come with extensive training requirements. On top of that, there is also a constant concern that the software contains all appropriate updates. Companies that want to avoid this headache may want to rely on outsourced payroll services. HR companies will supply payroll professionals who are adept at using cutting-edge software systems. In addition, they will provide peace of mind, as business owners can rest assured that the technology used to process their employees’ payroll information is always up to date and incorporates the latest relevant tax tables.


There are many benefits to utilizing an outsourced payroll company, including increased efficiency, reduced costs and lowered tax liability. If you fit the above characteristics, it may be time to consider whether using a payroll service company, such as FrankCrum, is a good choice for your business.

Image Credit: Bev Sykes 

Author: Damian Davila

Ideas and concepts from Damian Davila, Ecuatoriano thriving in Hawaii. Pro marketer and blogger. Find him at @idaconcpts on Twitter.