Businesses nowadays consider outsourcing as a strategic step to gaining competitive advantage. Many businesses tend to recruit administrator to manage their accounts, human resources, payroll, tax, and other financial responsibilities at the same time is a complex & time consuming affair. Yet, many employers still put much attention on all of these activities in-house, by not realizing how intricate these routine are becoming over time.
This new business model which has been widely accepted worldwide across both the private and the public sectors, provide multiple benefits. It enables the business process outsourcing provider to achieve business vision and mission in the shortest possible time. But before business employer focus on cost reduction, there are several critical areas that need to pay attention on, a reliable, reputable and professional payroll vendor allows the business to focus on the core business.
The following are some of the reasons why outsource your payroll is a good idea :
- You can focus on your business
Payroll is one of the major challenges to in-house payroll processors is simply the most time-consuming task to complete and hard to find the most effective way to deal with it. Besides, does not directly contribute to increase business sales. However, by carry it out poorly, it may trigger business liquidity.
This is because when businesses have to encounter various rules and laws when it comes to ACRA and IRAS. Most of the businesses find that, they need to put a lot of effort and time consuming to deal with it. There are legal requirements in tax reporting, e-filing and remittance which required professional representative to submit the reports using the least amount of time. In some cases, employers have to be aware of the new-hire requirement from Ministry of Manpower (MOM) rules, such an employee’s compensation insurance, reimbursements, welfare and etc.
You may need to set aside some of your business time and revenue to run in-house payroll if you received an unexpected notice from IRAS. For example, most common event are such as tax penalty or late filing penalty, not only business have to pay a fine, it will also jeopardize business reputation of weak internal control. If you can do it by yourself, but you will still need to deliver specific and ad-hoc reports for your custom analysis. Therefore, by turning over these to professional, business can fully attend to core business processes.
- You can access to expert
Outsourcing provides you with flexibility and control, staffed with payroll exports will asner your employee’s queries on the phone and act as single point of contact, especially when it comes to unforeseen scenarios that may affect your position in the market.
Another reason is to get access to technology. Today, most of the business rely on technology to smoothen business operations. Employee need to have direct access to their direct deposit and payroll information online, employers should provide such transparent option in order to be a competitive advantage. Expert will advise employers to invest in payroll mobile usage to keep track and look up for internal information like business cash flow.
Besides, a professional payroll firm will play a vital role to conduct in-house training for your internal management and staff, they will conduct a specialized training when there are changes in taxation, CPF and etc. rules in order to receive up to date information.
- You can saved up control costs
Outsourcing your monthly payroll will saved you a full headcount and mitigate business risks. According to the research, businesses tend to overpaying employee by 4% because of the indifferent in employee’s work time. When a business have a attendance tracker recordkeeping solution, it could create a more accurate data at the end of the day. In fact, many business can better utilised in other areas of business such as hire more salesman or saved up for future expansion or development. It has been proven to help business in long run.
- You can enjoy professional payroll processing services
Payroll outsourcing firm offer from basic to complex payroll administration service, they will maintain individual payroll files for each employee of the company like salaries, CPF, Levy, and reimbursements. Usually, they will offer an electronic e-slip via online platform. It will be easier for businesses to extract their data to deliver to each of employee.
In addition, annual income statement and submission of IR8A will be prepared for every eligible taxpayer. With the peace of mind, you can save yourself a lot of time and money, so you can focus on growing your business.
Tips to consider before Outsourcing
When choosing outsource provider, price, service and reputation are the three main points that you have to look for. On the other hand, you have to take into consideration such as :
- Security and Reliability of the firm – By providing your business details to the payroll parties, you are giving the access and power of attorney to sign on your behalf, therefore, a trustworthy and reputable firm is significant.
- Regulatory Compliance Capabilities and Track Record – The payroll provider will need to need to have updated government information in order to give a professional advice and importance of their familiarity or similar experience in your industry.
- Technology ( Brand / App ) – Customer must evaluate the payroll company’s technology as a good software will help businesses to grow.
- Accountant Interface – accessibility is an important element for businesses to access to their business record easily.