The importance of payroll outsourcing and why it matters

Payroll-services

The HR department is often the most underrated, under estimated and most misunderstood department in the business world. For others, the HR department just simply sits down quietly in their office and hardly seen going out to interact with employees on work hours. An average employee would think, that the HR department is probably one of the most relaxing job in the business world since they just see the HR officer sit down on their desk… and do nothing other than wait for the scheduled payroll day.

But did you know how payroll is a very important and crucial part of the corporate world? A simple mistake on salary deduction or computation of work hours can lead to a disgruntled group of employees that can cause the work operation of the entire company to be put on halt. Did you know that while your HR officer is busy monitoring your paycheck, they are also responsible on to the minor details that are beneficial to the welfare of the employees throughout their entire work hours of service? From social security benefits, phil health (Health Care in the Philippines), pag-ibig (Housing program for employees) and other salary deductions that actually matters for an employee.

Now imagine, calculating these work hours and deductions times the number of employees in the company making sure that a single cent is always credited to every person accordingly. Not only that, employees demand that their paycheck should be released on time during pay day. Would you like your paycheck to be delayed? Neither do the hundreds and thousands of your co-workers. How would you feel if you received your paycheck with miscomputed salary deductions? You would probably be walking towards the HR office ready to storm the entire place. And so, does the hundreds and thousands of your co-workers. Still want to trade places with your HR officer?

But what does HR officer do aside before the payroll schedule time? The HR officer also overlooks the performance of every employee making sure the working at their 100% optimum capacity. Among many other things, the HR officer has talk to employees who fell below their performance rate and identify the source of the problem so they can find a quick solution to deploy the employees back from their respective departments. Imagine dealing with different employees with different work behavior. And don’t forget – the deadline for payroll is coming up fast! Still want to trade places with your HR officer?

This article is not meant to build sentiments for HR professionals but rather a wake-up call. The great question now lies on the management:

  1. How effective are you lately as an HR professional?
  2. How is the productivity rate of your employees?
  3. Are you on time on your payroll schedule?
  4. Are you experiencing labor unions lately? Do you want to?

Being an HR officer is a tedious work that derives on a combination of psychological behavior and financial expertise at the same time. An effective HR management can lead to good productivity output for the company that can generate more sales and revenues. By outsourcing your payroll programs to a credible third-party company with expertise on finance, your HR management will be able to focus on the bigger things on the business such as the increase of productivity output from the employees as well as solving issues in regards to the employee – employer relationship.

Benefits of payroll outsourcing:

  1. Time saving and enhance productivity
  • Payroll processing is very tedious and time consuming. The need to monitor every salary deduction and being updated of different government agencies that are a mandatory requirement for every employer and employee would consume a lot of time for a business owner most especially attending all the required seminars to be updated about the mandatory labor requirements of every employee. With payroll outsourcing, the business owners or the management can focus on the most important aspect of their business because they do need to worry about the computation and monitoring for the payroll of their employees. Why spend most of your time counting work hours when you have bigger things to deal with?

 

  1. Minimize operating cost and cost efficiency
  • If you would shoulder the payroll processing yourself, you would:
  • You hire an HR officer without the assurance of being qualified to be effective on HR management skills
  • Calculate for the work hours for every employee
  • The cost of printing these paychecks
  • The time wasted on the need to sign these paychecks
  • The cost of distribution on the paychecks
  • The purchase and installation of accounting software
  • The cost on training and support on HR related activities
  • The cost on preparation of mandatory taxes and remitting these taxes to the government
  • With payroll outsourcing, there is no need for you to shoulder and experience all of these costs! Not only you get to deliver your payroll to your employees on time, you get to enjoy huge savings on your company for being cost efficient!

 

  1. Security on identity theft and funds
  • Here’s a fact. People change over time. Even with your most trusted HR manager, you are still potentially at risk on stealing personal details of your employees and even embezzlement / misappropriation of funds in the company. The abuse of trust and confidence is very common to HR managers that have been in the company for long period of time. Even with an accounting software, your designated officer from HR or finance can still manipulate the work-arounds to cover up for the misappropriation of funds.

 

  • With payroll outsourcing, confidentiality on all information related to your employees and your company are guaranteed safe. As a third-party payroll service provider, all they are tasked to do is to provide the payroll according to the employee’s work hours, salary deductions and making sure that it is given to them on time – and that’s it.

 

  1. Enjoy the benefits of HRIS (Human Resource Information System) without investing on one
  • Many companies do not realize how time consuming and expensive for a manual operation on payroll until they have really tried it on a hands-on process. Most of the companies will even realize not until years of operation – until they have a fast turn over on their HR manager because of the growing number of employees. To avoid this, companies invest on Human Resource Information System (HRIS) to automate payroll scheduling. But this system will also cost you a big amount of investment. Not to mention training your managers to operate the system.

 

  • With payroll outsourcing, you get to enjoy the benefits of the HRIS from your third-party payroll service provider without the investment of such system and the downtime on learning the HRIS.

 

  • Among the many benefits of the HRIS are the following:

 

Employers Gain ability to:

  • View Invoices and Payroll Reports
  • Access and Update Employee Information
  • Enter New Employees
  • Enter Time Reporting Information
  • Offer Benefit Open Enrollment
  • Communicate with Employees
  • Create Custom Reports
  • Track PTO ( Paid Time Off)
  • Upload Benefits Plans and Custom Benefits Documents
  • Upload Employee Handbooks and other HR PDF’s
  • Track Licenses / Certifications for Employees
  • Performance Reviews
  • Training Records
  • Total Compensation Reports

 

Employees gain access to :

  • Review Checks
  • Review Benefit Information
  • Update Information
  • Any Corporate Documents
  • Online Benefits Enrollment

 

  1. HRIS / Accounting Software system update cost and other technological advancement
  • So you decide to invest on the HRIS or accounting software for your company? Did you know that your cost does not only stop from there? Investing on a system also means investing on training and implementation of your software so it can be integrated according to your business. The cost doesn’t even stop there either. Every year, a new updated version of that software is being released to the market and I guess what – it’s not for free. As your company grows, so will your need for the software. If you do not choose to update your version, the software company may or can pull the plug on your access and risk on the disastrous effects of the downtime in your company.

 

  • And no the cost does not even stop there. As your company grows, so will be your approval officers on your HR/ Finance department. On the accounting software / payroll industry, you will have to pay the cost per user. Which means, depending on the amount of approval officers you have on your company – so does the need for your users on the software.

 

  • With payroll outsourcing, you do not need to experience all of these cost on software update and other technological advancement since this investment is already passed on to your third-party payroll service provider.

 

Over more than 15 years of payroll outsourcing expertise, Clasen Business Solutions has been the trusted brand by various companies and conglomerates in Cebu City, Philippines. Managed by a team of experts on business solutions and finance, Clasen Business Solutions can manage the payroll on your company, effectively and on-time delivery. While any system or company is not perfect, Clasen Business Solutions stands firm on the delivery of the payroll to your company with the utmost quality of work. As a company that is an expert on business solutions, accounting software and system integration, our clients get to enjoy the benefits of having a payroll system without the need of investing in one! We are equipped with the latest state-of-the-art accounting system that can deliver that results you have always been longing for.

Stop punishing yourself for all the payroll problems you need to experience every 15th and 30th of the month! We can help! Clasen Business Solutions provides free assessment on your business. To schedule for an appointment, feel free to contact us and our technical support representatives will get to you as soon as possible.

This blog is published by Jo A. Jamero, Business development consultant for Clasen Business Solutions. The author has been the official content creator, who has the passion to share his expertise and his work experience in the industry of business solutions over the years.

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