Making the decision to bring your payroll in-house or to use a payroll processing service can be a difficult decision to make for any organization. The bottom line is that the decision will be different for each organization. If you are currently evaluating whether to bring your payroll processes in-house or to use a payroll processing service, consider these four benefits of in-house payroll before making your final decision.
1. Long Term Cost
One of the most important factors when evaluating the benefits of processing payroll in-house is cost. Purchasing new software and spending the time to implement it can seem like an expensive, upfront cost. Make sure you’re not being shortsighted. Many organizations find that processing payroll in-house is much cheaper over the long term than outsourcing their payroll.
At first, it can seem that the upfront cost of using a payroll processing service is reasonable. Often the cost is presented as a base account fee with a fee per paycheck or per employee for processing. But when you look more closely, you’ll find a number of hidden fees that can quickly add up. Do you need to make an adjustment for a pay period for a single employee? That’s a fee. Do you need a report that the payroll service doesn’t offer out of the box? Another fee. That can balloon a quoted processing fee of $1 – $2 per paycheck to as high as $5 – $6 per paycheck. Make sure you thoroughly review your payroll processing service’s fees, and ensure you won’t be charged extra for important reports your organization needs or simple payroll adjustments.
2. Better Control and Security of the Payroll Process
The most common pain point for Payroll and HR Managers when it comes to payroll processing services is lack of control. When you choose to bring your payroll in-house you gain complete control over the payroll process. This allows you to make last-minute adjustments, run customized reports, and make sure that your employees are paid accurately and on time. With payroll processing services, any last-minute adjustments or custom reporting will not only cause a fee but can also disrupt employee pay schedules.
Keeping your payroll in-house also gives you far better control over your employees’ sensitive information. In a time when ransomware and data breaches are more and more common, exposing sensitive employee information to third-party services increase your exposure to hacking and data breaches. With in-house payroll processing, you’re able to keep salary, benefits, and work history private in your secure, in-house database.
3. Integration with Other Business Systems
Transparency and good financial stewardship are imperative for local governments and public sector organizations. In-house payroll helps you integrate payroll with your accounting software and other important internal software solutions. You can easily manage your payroll in the same central location you manage your other financial responsibilities. You can also create detailed reports that encompass the full financial obligations of your organization without relying on your third-party provider. This saves you and your staff valuable time and improves your budget’s accuracy.
4. Empower Employees with a Transparent Process
In-house payroll gives your employees direct access to payroll and HR processes. The best in-house payroll and HR solutions allow employees to have direct access to their personal information. They can track their paid leave, enter time off requests, and have the ability to see their holiday entitlements and pay stubs. This saves HR and Payroll Managers valuable time by replacing manual HR process with automated settings and notifications. It also lets employee enjoy more control over their time, leave, and pay processes.
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