{"id":562730,"date":"2022-02-28T06:39:11","date_gmt":"2022-02-28T04:39:11","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=562730"},"modified":"2022-02-28T08:25:58","modified_gmt":"2022-02-28T06:25:58","slug":"understanding-the-pros-and-cons-of-outsourcing-payroll","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/industry-news\/562730\/understanding-the-pros-and-cons-of-outsourcing-payroll\/","title":{"rendered":"Understanding the pros and cons of outsourcing payroll"},"content":{"rendered":"<p>Every business needs to run an accurate, compliant payroll to stay in the South African Revenue Service\u2019s (SARS) good books, avoid incidences of fraud or error, and maintain good relationships with its employees.<\/p>\n<p>At the same time, business owners want to minimise time and money they spend on running payroll so they can focus resources on growing revenues and profits.<\/p>\n<ul>\n<li><a href=\"https:\/\/www.sage.com\/en-za\/cp\/sagecloudpayrollsoftware\/?utm_source=BusinessTech&amp;utm_medium=Article&amp;utm_campaign=February+2022\" target=\"_blank\" rel=\"noopener\"><strong>Click here to find out how to stay ahead this Tax Year-End<\/strong><\/a><\/li>\n<\/ul>\n<p>There are two routes your company can take towards its goal of running a cost-effective payroll that meets SARS\u2019s regulatory requirements: setting up your own payroll team and systems, or outsourcing payroll processing to an external service provider.<\/p>\n<p>Both approaches have their pros and cons. Let\u2019s take a closer look:<\/p>\n<h3 class=\"my-4\"><strong>Running an in-house payroll<\/strong><\/h3>\n<p>Many small and medium business owners prefer to run payroll services in-house because they want to maintain close control over their finances and employee data.<\/p>\n<p>If they already have a good admin team in place, they can often run the payroll in-house at a lower cost than they would need to pay an external provider.<\/p>\n<h3 class=\"my-4\"><strong><em>Pros<\/em><\/strong><\/h3>\n<ul>\n<li>Given that cloud-based payroll software is so affordable these days, it might be more cost-effective to run the service in-house.<\/li>\n<li>You\u2019ll have instant access to payroll data when you need it to, for example, make changes or additions.<\/li>\n<li>You\u2019ll be in control of all processes and systems.<\/li>\n<\/ul>\n<h3 class=\"my-4\"><strong><em>Cons<\/em><\/strong><\/h3>\n<ul>\n<li>You may need to train or hire people to run the payroll.<\/li>\n<li>Your financial team might spend a lot of its time on payroll admin rather than focusing on strategic growth.<\/li>\n<\/ul>\n<h3 class=\"my-4\"><strong>Outsourcing the payroll <\/strong><\/h3>\n<p>Outsourcing the payroll might make sense if you and your team don\u2019t have enough hours in the day to do this task.<\/p>\n<p>Perhaps you\u2019ve only just started hiring people and don\u2019t have the time to skill up a resource to manage the payroll.<\/p>\n<p>Or you would rather use your time and resources to focus on business development.<\/p>\n<h3 class=\"my-4\"><strong><em>Pros<\/em><\/strong><\/h3>\n<ul>\n<li>You can free up time and resources to focus on your core business.<\/li>\n<li>You can eliminate the need to train or hire in-house payroll staff.<\/li>\n<li>Payroll outsourcing can bring transparency and predictability to payroll processing costs.<\/li>\n<\/ul>\n<h3 class=\"my-4\"><strong><em>Cons<\/em><\/strong><\/h3>\n<ul>\n<li>You will need to entrust a third party with sensitive staff information.<\/li>\n<li>You will not be able to access or change payroll information yourself, which could lead to delays and extra layers of bureaucracy.<\/li>\n<\/ul>\n<h3 class=\"my-4\"><strong>Choosing a payroll outsourcing provider <\/strong><\/h3>\n<p>So, how do you choose a payroll provider? The answer to this really depends on how big your company is and how much help you need with your payroll tasks.<\/p>\n<p>If you\u2019re running a smaller business, there\u2019s a chance your accounting practice can help.<\/p>\n<p>Larger businesses with bigger payrolls or international operations might turn to a payroll specialist with a multinational operation.<\/p>\n<p>Ask yourself:<\/p>\n<ul>\n<li>Does the payroll provider have a reputation for quality service?<\/li>\n<li>Is it using a modern payroll software platform?<\/li>\n<li>Does it have a proven track record for compliance, including the ability to keep employee data safe?<\/li>\n<li>How does its pricing compare to the market and to internal costs?<\/li>\n<li>Which services do you require \u2013 keeping employee records, generating payslips, and making payments to SARS?<\/li>\n<\/ul>\n<h3 class=\"my-4\"><strong>Making compliance easy<\/strong><\/h3>\n<p>Most of the work of running a payroll lies in monthly preparations, such as calculating hours, absences, and bonuses for a mixture of salaried and contract staff.<\/p>\n<p>The good news is that automated software can take care of much of this work for you, such as:<\/p>\n<ul>\n<li>Recording employee details.<\/li>\n<li>Working out employee pay and deductions.<\/li>\n<li>Reporting payroll information to SARS.<\/li>\n<li>Calculating how much you owe SARS.<\/li>\n<li>Working out amounts like sick pay or maternity pay.<\/li>\n<\/ul>\n<p>Choosing the right payroll software will help to alleviate your worries about compliance with SARS regulations so you can focus on growth rather than admin.<\/p>\n<p>Visit <strong><a href=\"https:\/\/www.sage.com\/en-za\/cp\/sagecloudpayrollsoftware\/?utm_source=BusinessTech&amp;utm_medium=Article&amp;utm_campaign=February+2022\" target=\"_blank\" rel=\"noopener\"><strong>tax.sage.co.za<\/strong><\/a><\/strong> for the latest expert advice, tips and support to help you stay ahead this Tax Year-End.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Every business needs to run an accurate, compliant payroll to stay in the South African Revenue Service\u2019s (SARS) good books, avoid incidences of fraud or error, and maintain good relationships with its employees.<\/p>\n","protected":false},"author":57,"featured_media":562750,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10459],"tags":[1033],"class_list":["post-562730","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry-news","tag-sage"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/562730","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/57"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=562730"}],"version-history":[{"count":6,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/562730\/revisions"}],"predecessor-version":[{"id":563180,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/562730\/revisions\/563180"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/562750"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=562730"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=562730"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=562730"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}