Payroll Outsourcing

3 Common Mistakes to Avoid When Outsourcing Payroll Services

For most small businesses with a lack of expertise and limited resources, efficiently managing their payroll services is the biggest challenge. As such, payroll outsourcing to an expert such as GOHRBPO becomes pertinent. This enables an organisation to achieve high levels of operational leadership, cost-efficiency, time savings and compliance.

However, there are some common mistakes you should avoid when outsourcing payroll services. Let’s check them out:

1. Overlooking Errors in Setup

One of the biggest mistakes that small businesses tend to do is not setting up the payroll function carefully. This will prevent you from getting the desired results. It is crucial that your business is registered, with your federal, state and local tax withholdings set correctly. It is also important to classify the employees properly. Otherwise, this can lead to non-compliance issues and penalties.

Furthermore, when you are considering payroll outsourcing services, you’d not want to classify your employees incorrectly. Therefore, all employee and tax records and other payroll information must be arranged systematically to set up an accurate payroll account.  

2. Not having a definitive strategy or goals for outsourcing

Many organisations tend to embrace HR outsourcing without considering what they actually need or which is the best fit for their company. This can result in going overboard without having a clear idea of why or how much you need to outsource. In no time, you will spend a substantial portion of your budget outsourcing, without actually deriving quality results.

Identify definitive goals for payroll outsourcing and how much you can spend reasonably.

3. Choosing based only on pricing

This is one of the most common mistakes that small businesses make when choosing an outsourcing partner – they choose based only on pricing. They often overlook all other benefits that a professional payroll management company has to offer, which can help stay compliant and reduce risks. As such, quality and reliability of services is compromised.  

In addition to comparing the cost of managing payroll internally against outsourcing, you should also consider other factors such as payroll software used, experience of the company, level of accuracy in payroll processing, etc.

Avoiding these common mistakes will help you outsource payroll services to a professional company like GOHRBPO.        

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