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6 ways outsourcing your payroll boosts productivity and protects your business

Posted by Grace Townsley

December 14, 2022

One of the quickest ways to increase your small business’ productivity and maximize your budget is to outsource a handful of essential business tasks. 

Not only does outsourcing save your internal team considerable time, especially when it comes to tedious and repetitive tasks, but having a dedicated external team handle your tasks also gives you access to a higher quality of administrative support at a more affordable rate than employing full-time professionals. 

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What kind of companies should consider payroll outsourcing services?

Payroll outsourcing services are particularly beneficial for small businesses that have a limited internal team or who are looking for increased transparency and efficiency. In fact, an estimated 45% of small businesses already outsource this essential service!

If you’re a business owner or startup founder who handles your own payroll, outsourcing this service can free your time and headspace. If you have an accounting team already, releasing them from payroll duties gives those team members the opportunity to focus on more valuable tasks, like financial reporting, forecasting, budgeting, bookkeeping and planning. 

Whether you’re contemplating outsourcing or already outsource some services, there are many benefits to partnering with payroll management outsourcing services in 2023 and beyond.  And if you have any residual doubts about outsourcing’s efficacy, check out our related blog, 10 companies that have benefited from outsourcing. 

Here are six great benefits of outsourcing payroll:


1. Maximize your time

The most obvious benefit of payroll outsourcing services is the time you and your team save by not having to handle this weekly, bi-weekly, or monthly task. 

According to a survey by QuickBooks Payroll, business owners who handle their own payroll spend an average of nearly five hours per pay period handling the processing, accounting, and paperwork required by payroll activities. If you pay your employees every other week, that time spent on payroll adds up to over 16 work days per year! 

Imagine what you could do with over three extra work weeks added to your year. 

2. Improve the accuracy of your payroll

Did you know as many as 30% of businesses have misclassified their employees? And in 2020, the IRS charged $6 billion in employer penalties for payroll tax errors. Making a payroll mistake comes with serious consequences. 

When you hire a payroll outsourcing service, you immediately reduce the likelihood of payroll errors. Most payroll services use advanced payroll processing automations and technology to streamline the process and improve accuracy. 

With fewer manual calculations and more foolproof automations, your business is better protected. 

Talk to an expert to find out how Escalon’s experts can take payroll off your plate.


3. Reduce your budget

If your internal accounting or HR team is handling payroll, you have the potential to save an average of 18% on payroll costs, compared to those who choose to outsource this service. That’s because when you hire an external payroll team, you only pay for the work you need completed. 

When you have your HR or accounting department handle payroll, you’re paying for their salary or hourly wages, benefits for full-time employees, and hiring and training costs when you experience turnover. Those expenses add up quickly! 

4. Benefit from expertise

Payroll management outsourcing services have developed a high level of expertise in this area. After all, payroll is all these teams do! 

That means any small business that leverages outsourced payroll services benefits from the highest level of experience and knowledge available — higher than they may enjoy by hiring this position on their own. 

If you have a question, face an unusual situation, or go through a period of hiring which triggers significant payroll and tax adjustments, having an experienced team just one phone call or email away is a significant benefit, both financially and for your peace of mind. 

5. Give your employees greater access

Many payroll outsourcing services offer helpful digital tools that give your employees greater access to and control over their finances. From digital hours tracking and vacation requests, to on-demand pay information and withholding adjustments, your outsourced payroll services make it easier for your employees to manage their information without having to request help. 

That reduces your time spent handling these daily tasks and empowers your employees. 

6. Greater security

No business is immune to fraud — and payroll is a particularly at-risk activity. Outsourcing your payroll services to an external company significantly reduces the likelihood of fraud, theft and security breaches. 

Plus, reputable payroll companies invest heavily in top-level data security systems that protect your employees’ sensitive information. With highly-secure data servers, industry-leading automation software and information back-ups, you can trust that your employees’ information is protected. 

Together, the enhanced transparency and data security these companies offer safeguard your business’ future. 

Key takeaway

No matter the age, growth stage, or size of your small business, it can benefit from outsourced payroll services. The cost savings, increased transparency, greater productivity and stronger security work together to protect your company and streamline your work. 

Want more? Escalon is the one-and-done solution for Essential Business Services. These include PeopleOps (HR, benefits, recruiting and payroll), FinOps (accounting, bookkeeping and CFO services) and Risk (business insurance. Talk to an expert today.

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Grace Townsley
Grace Townsley

As a professional copywriter in the finance and B2B space, Grace Townsley offers small business leaders big insights—one precisely chosen word at a time. Let's connect!

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