Four Big Reasons for Outsourced Payroll Services

BY Eddy Hood In Outsourced Accounting Services On Jun 01, 2012 With 0 Comments

Four Big Reasons for Outsourced Payroll Services

Savvy business owners and managers have long known that the key to running a successful business is to focus on your core competencies. Businesses that succeed at that can often drastically reduce costs (and increase profits!) by outsourcing the functionality they do not specialize in to contractors that DO have those specialties.

One of the first functions a company typically considers is outsourced payroll services.

Let us look at four big reasons they might decide to do so:

  1. The cost – This is the most cited reason when business owners are asked why they made the decision to outsource. Also, there is a double benefit here; owners save direct costs as well as time. The direct costs associated with payroll can easily add up to thousands of dollars, not to mention all the extra free time you and your staff will have to engage in value-adding activities pertaining to your own product or service.


  1. Avoid Penalties and Personal Annoyance – Recent statistics from the IRS indicate that nearly half of all small businesses (40%) pay tax penalties, which on average total nearly $1,000 per year! Additionally, due to the time consuming and exacting nature of the task, many owners find the work tedious and painful to perform, and are happy to pay a reasonable cost simply to avoid it.


  1. Keep Reporting Current and Employees Happy – As anyone who has ever performed payroll services is acutely aware, the reporting requirements associated with it can be difficult and time consuming to fulfill. Concurrently, your employees are increasingly in want of services that provide conveniences to them such as direct deposit of their paychecks. Both of these circumstances are alleviated when payroll is outsourced.


  1. No Ongoing Training Needed – The final big benefit to outsourcing your payroll is that you will not need to devote any time or energy to keeping abreast of developments in the payroll sector. These are all too frequent, and require constant adaptation to stay on top of. Different forms, different regulations, and different rates can be extremely confusing. Also, outsourcing will render you immune to damage from employee turnover; you do not risk losing all your expertise if one key person ever decides to walk out the door.


These are just a few of the many compelling arguments one can make in favor of outsourced payroll services. Hopefully this article has persuaded you to investigate and see if these services would be a good fit for you and your company.

My name is Eddy Hood. I've coached over 500 businesses on how to become more profitable. I'm the Founder & CEO of Ignite Spot, and I have mad parallel parking skills.

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