5 reasons to choose payroll outsourcing

December 28, 2021

Focusing on the core activity of the business is what ensures the success and profit of the organization. For this reason, today, an increasing number of companies that are concerned with increasing their income opts for the outsourcing of various services, including personnel department and human resources routines , such as Payroll services in Dubai.

But what is payroll outsourcing and why can it be important to my company? Want to know more? Keep reading!

What is payroll outsourcing?

Monthly payroll processing is a complex routine that requires a great deal of labor, due to the complexity of  United Arab Emirates labor legislation , which is one of the most detailed and detailed in the world

For this reason, specialists working in the area must be able to perform the tasks in a simple way and be available to answer any doubts of employees, from the most diverse hierarchical levels of the company. Given this complexity, the solution found by many companies has been to opt for outsourced service.

Payroll outsourcing   avoids many internal issues related to miscalculation, and is also used as a strategy by companies around the world to maximize their resources.

With it, organizations from the most diverse segments have more time to dedicate themselves exclusively to their true business and, furthermore, reduce costs.

And why should I outsource the payroll?

While some organizations may choose to handle payroll internally, there are a number of benefits for you and your company if you decide to outsource payroll with the support of an experienced and reputable supplier.

Check below 5 reasons to choose outsourcing payroll in your company:

1. Payroll outsourcing saves time

One of the main challenges for internal payroll processors is simply the amount of time needed to complete the job and the inability to find a fast track to efficiency.

If you handle your payroll internally,  you know it takes a lot of time and attention to detail . This demand on your time increases as your team grows.

Each pay period becomes a series of checks and balances to ensure that no mistakes are made when handling a considerable amount of data that varies from one employee to another.

This is the time taken from the main tasks that help you manage and develop your business. When you outsource your payroll, you immediately free up all that time.

You can dedicate this free time to refine sales and marketing strategies and improve workflow efficiency. The inability to relinquish control and the failure to delegate tasks to better manage your time is a bad business habit that you need to give up.

2. Indirect costs are reduced

As an HR manager, your time has a value in dirham that is linked to the revenue you generate from the tasks you handle at any time. In other words, the time you can save each day is money earned for the company.

With that in mind, think of all the time you have spent and continue to spend on these payroll tasks in each pay period:

·     Calculate employee schedules, deductions, time limit paid, sick leave and taxes;

·        Print, sign and distribute wages or receipts to employees;

·        Process payments for direct deposits or electronic payments;

·        Generate payroll reports;

·        Prepare and submit local, state and federal payroll taxes.

If you look at the total time you spend on payroll in each pay period compared to outsourcing costs, you will see huge cost savings when you take these tasks off your back.

3. More data security

There is a fair amount of risk that comes with the internal payroll. The door is open for identity theft; employee records can be viewed by those who deal with the payroll; employees can manipulate records for personal gain, and there is also a risk of embezzlement.

In addition to these risks, you will need to consider the security of your  HR software . While the software itself can be relatively secure, you can host your data on a server or network with security holes that can leave you open to data theft.

Read also: Are you looking for Auditors in Dubai

By comparison, outsourcing your payroll generally means that your data is stored on highly secure servers that use state-of-the-art encryption technology, in addition to redundant data backups.

If you want that same level of security in place, you will need to spend a significant amount of capital to create a secure network. Cloud-based payroll services do not charge extra for this type of security, as this state-of-the-art approach to storing and protecting data is simply a standard part of the service.

4. Ensuring compliance with laws

We have mentioned the potential costs of payroll errors, which are a very real possibility and you, as an HR manager, are legally responsible for any cases of misrepresentation or failure to accurately file federal and state agencies.

Even a single mistake can leave you open to costly audits and penalties. As regulations change constantly, often throughout the year, it is unlikely that you will be able to  stay on top of all these changes  while looking for ways to improve HR management.

Payroll companies understand tax legislation. It is your business to keep up with the rules, regulations and changes in this document. They guarantee accuracy and compliance. If there are errors, they will make corrections when dealing with responsibility for any problems that may happen.

5. Access to a variety of services

Even an experienced accountant has a limited skill set. With third-party payroll services, you typically get a variety of services and the benefit of an entire organization.

In addition to standard payroll and tax calculations, some platforms offer additional value-added services, such as contract generation, contracted services, labor law compliance, access to health benefits, workers’ compensation payments and services accounting.

Identify the services most relevant to your needs and find a provider that offers those services, or one that allows you to customize a plan based on your specific needs.

What care should be taken when outsourcing payroll?

Now that you know the reasons for choosing to payroll outsourcing in your company, be aware of the precautions to be taken when hiring this service.

Search for service provider references

When hiring the service provider, the entrepreneur must seek references and be alert to choose an outsourced company that effectively has the technical and moral conditions to work in partnership with your company.

In addition to these aspects, it is important to make sure that the company will be able to meet the requirements of labor, tax and tax laws, so that the contractor does not have problems in the future.

Check the payment receipts

All receipts for payment of labor, social security, tax and related to the third party’s liability charges must be required and, frequently, presented to the contracting company for investigation.

Follow the processes

The contractor may require the contractor to provide services with quality and within the terms defined in the contract. You can also watch over the execution of the work, but any charges or requirements must be made directly to the person in charge of the contracted company.

Check the outsourced activity-end

The organization to be hired must be a specialist in the type of service proposed, which can be proven by the presentation of the technician responsible and the end activity of the outsourced person, contained in the contractor’s social contract.

Depending on the type of service to be performed, whose remuneration is significant, it is important that the contractor proves to the contractor its financial strength, that is, its economic sustainability. Thus, you will have a safer and more efficient payroll outsourcing process.

What processes can be outsourced on the payroll?

In the monthly routines, we can highlight the calculation and processing of the payroll, salary advances, admissions, terminations of contracts with assistance in the unions or in the Ministry of Labor and Employment for approvals, list of documents and other legal subsidies.

The calculation of individual and collective vacations can also be outsourced, as well as the issuance of documents, guides, paychecks and labor charges.




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