There are pros and cons to outsourcing your payroll services, as with any type of work from your business. So it is important that you look into the company extensively before making a final decision.
Some of the disadvantages of outsourcing your payroll services:
Loss of managerial control:
When outsourcing your payroll services you will be required to upload all of your company’s financial information. They will also need all of your employees personal details. Both of which are highly confidential.As this will be saved onto the payroll company’s server, you then may find details harder to access. This can prove awkward should any alterations be required. There is also the consideration that if the company are unable to safeguard your data, your company may become vulnerable. Possibly leading to theft, or employee lawsuits should anything go wrong.
Security and confidentiality:
The payroll services company that you choose needs to provide assurances that your data is fully protected. They may have access to such things like product designs or formulas depending on the type of business that you own. All of which can be detrimental to your company should they not be protected to a high level. Therefore it is important to find a company that has a penalty clause within its contract for your own peace of mind.
Paying for services you don’t require:
Many of the companies that offer payroll services provide a cheaper deal if it is set up as a full package. However, you may find that some of the additional services can be completed at a cheaper cost onsite. So before approaching a company, be confident in what precise services you require so that you can avoid being drawn into their sales pitch.
Chance of hidden costs:
If you are outsourcing your payroll services you will be required to sign a contract. This will be drawn up by the company that you select, outlining all the details of the services that they will provide for you. Anything extra that is not mentioned will incur additional charges. Also, it is advisable that you hire a lawyer to read through the contract before signing it which can prove costly in some cases.
Quality of their work:
As you are outsourcing your payroll services, you may find that their quality of work may fluctuate. With errors being made, and possible deadlines not met. This is another area that needs to be covered in the contract. The company should provide you with a checklist of all the work that they will do for you. If any problems do arise, you need to ensure that you are legally covered to protect your business.
Payroll comes with a lot of laws and regulations that have to be obligated. The last thing any business owner wants is to face penalties for errors made by the company that they have hired. Therefore it takes careful consideration before you outsource your payroll services.Read this for more info: http://payrollservicesforsmallbusiness.org/outsourcing-payroll-advantages-and-disadvantages.html