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Benefits of Outsourcing Payroll for StartUps

Posted by Kanika Sinha

April 29, 2018

Did you know that business consultants often recommend outsourcing non-core functions?

A non-core function is one that isn’t part of your profit center. It’s something you don’t charge your customers for. While a non-core function is often essential to your successful operation, it isn’t what sets you apart from the competition, so it can be outsourced.

It’s also of the utmost importance to your staff.

Payroll is a non-core function and one you should certainly think about outsourcing. To help you make your decision,

Let’s look at the benefits of Outsourcing Payroll for Startups

You Save Time

Payroll takes a lot of time whether you have two employees or ten. It’s not something you can put off for another day.

Payroll requires time at least twice a month. It may involve data entry and double-checking. You have to know the regulations and laws and stay up-to-date on them.

If you spend your time on payroll, you aren’t doing the business of growing your startup.

You Save Money

Ultimately outsourcing your payroll saves you money right along with time.

You save money because you aren’t spending time calculating payroll, printing, signing and distributing checks and generating reports.

In addition, you save money because someone else is sending in your payroll taxes so there’s less change of a costly mistake.

You Enjoy Better Security

Using an outsourced payroll partner gives you an extra layer of security.

You don’t have to worry about an employee skimming off the top, stealing an identity or tampering with your personal records.

Your outsourced payroll company is likely using top notch software with more security layers than you might be able to afford.  With an outsourced company, your payroll data is confidential, backed-up on superior software and protected.

You are Government Compliant

Most startup owners aren’t experts in payroll tax regulations. They aren’t well-versed in how to report employment taxes to federal and state government agencies.

It’s easy to make mistakes that lead to IRS audits and even penalties, and this isn’t something that’s good for your startup.

What’s more, government rules and regulations change regularly, and it’s hard to stay on top of the changes.

Your outsourced payroll partner is an expert in the field and as such stays on top of rules, regulations and changes in tax rates.

You Improve Efficiency

Outsourcing helps you get your work done with better efficiency. If you outsource your payroll, you have more time to focus on growing and marketing your business.

You’ll find that an outsourcing partner can help you in several other payroll-related areas. Your outsourced payroll team is likely an expert at human resources and can assist you in this broader area as well. Consider the following areas where your outsourcing company can assist:

  • They can set up your payroll from day one and provide ongoing maintenance.
  • Your outsourced team can provide new-hire onboarding and training.
  • They can provide payroll reporting to your accounting department.
  • Payroll providers can handle your tax filing and W2 reporting and filing.
  • Outsourced teams are able to handle terminations and employee issues.
  • They make sure you stay compliant with labor laws and payroll regulations.

Final Thoughts

Yes, you should consider outsourcing your payroll.

It’s essential to the well-oiled machine that is your startup. You have to pay your employees, and it’s not something you can put off from day-to-day because you’re too busy.

Payroll is how you recruit and retain your employees. It’s what keeps your staff happy. Make a mistake, and you’re sure to hear about it. Make it more than once, and you risk losing your staff.

You don’t have time to be a payroll whiz. Avoid costly mistakes and seriously weight the pros and cons of outsourcing your payroll.

Are you a new startup ready to succeed? Are you looking to get your new business off the ground and watch it rise to success? We are here for you. We can help answer your questions and guide you through the process. Outsource your HR duties, finances, payroll and more to us. Contact Escalon today to get started.


Kanika Sinha
Kanika Sinha

Kanika is an enthusiastic content writer who craves to push the boundaries and explore uncharted territories. With her exceptional writing skills and in-depth knowledge of business-to-business dynamics, she creates compelling narratives that help businesses achieve tangible ROI. When not hunched over the keyboard, you can find her sweating it out in the gym, or indulging in a marathon of adorable movies with her young son.

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