To stay ahead in the business world, you need to grab any opportunity with both hands that will make your business more competitive. There are a number of ways you can make smart decisions to become more profitable and a number of these rest with the financial processes in your business.
Weighing the cost vs. benefit of a Payroll Administrator
The Payroll process is important in any business. As a payroll administrator, if you are not working efficiently in carrying out all the tasks involved in paying the company’s employees, it can lead to some serious employee morale issues as well as potential financial penalties further down the line.
In most companies, there is a traditional process and permanent roles in place for payroll administration that besides requiring extra members of staff, also necessitates additional investment in payroll software and ongoing staff training to stay up to date with legislature changes.
Often in smaller businesses, the owners feel forced to carry the responsibilities of the payroll administrator, not wanting to take on the risk of another permanent employee that ultimately results in their valuable time being wasted. Time that could otherwise be used to follow potential revenue-generating activities.
Whether you are a small, medium or large business it is important to weigh up the cost vs. benefit of a permanent staff member or department handling payroll administration opposed to outsourcing. There can be a significant competitive advantage to outsourcing your payroll administration, either in cost reduction or realising your opportunity cost.
By looking at the advantages of outsourcing, these benefits can be made clearer.
The advantages of outsourcing payroll
Outsourcing your payroll administration can offer numerous advantages for small and large businesses.
- Free up resources / cut costs
In smaller businesses where fewer staff resources are available, time is often wasted carrying out payroll administration where it could be better spent following revenue-generating activities if these tasks were outsourced. In larger organisations, permanent staff members are employed. This means monthly salaries and benefits needs to be paid including leave, sick days, maternity, etc. Additionally another temp needs to be brought in for leave periods. These costs increase your overall risk. By outsourcing you bypass the associated risk and cost of in-house payroll administration.
- Draw from expert knowledge
Outsourcing your payroll means you no longer need to keep you or your staff up to date with the latest changes in the tax world. That means no ongoing training costs and avoiding the risk of any errors or penalties should legislature not be followed correctly. Instead you are paying for peace of mind, knowing that the company you outsource to is staying abreast of any changes.
- IT considerations
In-house payroll requires investment in hardware and payroll software. As hardware requires replacement every few years and software needs regular licensing, this can equate to a significant expenditure. With outsourcing, this needn’t be a consideration.
- Secure consistent quality
Choosing to outsource your payroll administration ensures consistent quality. If the accounting firm you use is no longer delivering the quality you expect, you can easily switch to another firm. However replacing a poorly performing staff member is a lot more difficult. You can also be sure that you are receiving a service from a knowledgeable, trained source. Whereas if an employee resigns, all their knowledge leaves with them.
How we can help you with your Payroll?
At Dirmeik consulting, we offer a range of payroll services to allow you to take advantage of the many benefits associated with outsourcing. Our payroll services include:
- Preparation & Provision of IRP5 Documentation
- Electronic Filing of IRP5 Documentation
- Salary Administration
- Remuneration Restructuring & Advisory Services
- Applying for Dispensations
- General Employment Law Advice
- Pension’s Advice & Implementation of Pension Schemes
- Share Options & Incentive Schemes
- Liaison with SARS, UIF & WCA
- PAYE, UIF & SDL Registration & Calculations
- Printing of Payslips
For more information on how we can help your business, phone Brett on 021 421 4444.