{"id":6571,"date":"2021-07-01T20:12:47","date_gmt":"2021-07-01T14:42:47","guid":{"rendered":"https:\/\/open.money\/blog\/?p=6571"},"modified":"2025-06-06T17:05:25","modified_gmt":"2025-06-06T11:35:25","slug":"should-small-businesses-outsource-their-payroll","status":"publish","type":"post","link":"https:\/\/open.money\/blog\/should-small-businesses-outsource-their-payroll\/","title":{"rendered":"Should small businesses outsource their payroll?"},"content":{"rendered":"Processing payroll is a recurring financial operation for every business. And since payroll is a substantial business expense, small businesses need to set aside dedicated time & resources on it periodically.\u00a0<\/span>\r\n\r\nResearch suggests that,<\/span>\u00a0on average, a small business spends over <\/span>120 hours in a year on payroll taxes<\/a><\/span> alone. And that\u2019s excluding the time spent on rectifying payroll miscalculations.<\/span>\r\n\r\nMost SMEs manage their payroll on spreadsheets. Some businesses prefer their payroll to be handled by external professionals to avoid any delays. This, in turn, creates more bandwidth for the team to focus on business growth goals. <\/span>\r\n\r\nBut which payroll approach is most suitable for your business & why? Let\u2019s dive into the deets. \u2935\ufe0f\r\n\r\n \r\n

Advantages & limitations of outsourcing payroll<\/b><\/h3>\r\nIf you\u2019re looking at outsourcing your payroll, you must first consider the perks & setbacks of doing so. This will\u00a0 help you make an informed decision that’s most suited for your business.\u00a0<\/span>\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n
Pros<\/b><\/td>\r\nCons<\/b><\/td>\r\n<\/tr>\r\n
Efficient & accurate<\/span><\/td>\r\nProne to errors<\/span><\/td>\r\n<\/tr>\r\n
Focus on organisational goals\u00a0<\/span><\/td>\r\nTime-consuming & tedious<\/span><\/td>\r\n<\/tr>\r\n
Simplified verification\u00a0\u00a0\u00a0<\/span><\/td>\r\nRepetitive verification\u00a0<\/span><\/td>\r\n<\/tr>\r\n
Single repository for tax declarations<\/span><\/td>\r\nManual efforts<\/span><\/td>\r\n<\/tr>\r\n
Employee self-service portals<\/span><\/td>\r\nExpensive<\/span><\/td>\r\n<\/tr>\r\n
Reduces paperwork<\/span><\/td>\r\n<\/td>\r\n<\/tr>\r\n
Adhere with compliance<\/span><\/td>\r\n<\/td>\r\n<\/tr>\r\n<\/tbody>\r\n<\/table>\r\n \r\n\r\nIn the above table, the pros of outsourcing payroll seem to outweigh the cons. This indicates that outsourcing payroll is a relatively viable option. However, there is a twist in the tale. \ud83d\ude2f\u00a0<\/span>\r\n\r\nTraditionally, outsourcing payroll means finding an agency that will manage your payroll end-to-end. They might do it manually or with the help of a software\/tool.<\/span>\r\n\r\nBut imagine having an option where you don\u2019t need to outsource your payroll but can benefit from the pros of outsourcing. Baffled? \ud83e\udd14 Let me explain.\u00a0<\/span>\r\n\r\nWhat if you could manage your payroll in-house with a smart & efficient payroll management<\/a> solution? One that\u2019ll help you <\/span>save all the time<\/span><\/i> & resources<\/span><\/i> spent on manually tracking, calculating & processing payroll. This way, you can stay in full control of your payroll anytime, anywhere. At the same time, ensure that accuracy & compliance is maintained along with automation of payroll.\u00a0<\/span>\r\n\r\n \r\n\r\n\"GIF\"\r\n\r\nSounds like the best option there is, doesn\u2019t it? Let me unveil this state-of-the-art payroll solution built ground up for your business.<\/span>\r\n\r\n\ud83e\udd41 <\/b>\u00a0Open Payroll<\/span><\/i> \u2014 India\u2019s best payroll solution for small businesses. \ud83e\udd41<\/span>\r\n\r\nBut before we deep dive into the benefits & features of the platform, let\u2019s analyse when is the right time to consider a payroll solution. <\/span>\r\n\r\n \r\n

When should small businesses consider a payroll management solution?<\/b>\u00a0<\/b><\/h3>\r\nSmall businesses usually outsource their payroll when their employee count reaches 15 & above. Some consider payroll management solutions instead so as to avail swift & easy salary processing<\/a>. But the real question here is \u2014 should small businesses consider a payroll solution right from day one?\u00a0<\/span>\r\n\r\nWell, the answer is yes! \ud83d\ude4b\u200d\u2640\ufe0f Businesses should hunt for a complete payroll solution that caters to their needs right from the start. This will enable them to set up a hassle-free payroll process from the beginning \u2014 without actually needing to outsource it.<\/span>\r\n\r\n \r\n

Why should small businesses manage their payroll themselves?<\/b><\/h3>\r\nSalary processing can be quite a battle for small businesses<\/a> like yours that juggle multiple tasks. Your time is the most valuable resource & running a small business certainly requires a lot of time & effort.\u00a0<\/span>\r\n\r\nIn order to grow your business rapidly, you\u2019d need to focus on expanding & scaling your business. And for this, business processes like payroll must be made simple, both for you & your team.\u00a0<\/span>\r\n\r\nIf your team is managing payroll the traditional way, they must be doing it in 3 stages:<\/span>\r\n
    \r\n \t
  1. Pre payroll activities<\/span><\/li>\r\n \t
  2. Actual payroll process<\/span><\/li>\r\n \t
  3. Post payroll process<\/span><\/li>\r\n<\/ol>\r\nAlthough the steps involved are not very complicated, the whole process does eat up a lot of time. This is certainly the time that you might as well invest in more lucrative tasks.<\/span>\r\n\r\nHowever, outsourcing your payroll is expensive. The fee can vary depending on various factors such as the location of your company, size of the workforce, frequency of the payroll, tax requirements, etc.<\/span>\r\n\r\nHence, it\u2019s important to consider a payroll management solution that you can afford to help you organize & fast track your payroll. Also, this will help you manage your entire cash flow in one place.<\/span>\r\n\r\n\u00a0<\/span>\r\n

    How to choose a suitable payroll solution for your business?<\/b><\/h2>\r\nWhile choosing a payroll solution, you must ensure to choose one where your entire payroll can be automated. Not one where someone still has to oversee the steps before the disbursal. You must consider your finances & do the math based on the number of employees you intend to hire. All of this while making sure compliance is maintained.<\/span>\r\n\r\nHere are some useful features that you should watch out for:<\/span>\r\n
      \r\n \t
    1. Automated processing – Auto-calculations & timely automated payroll processing<\/span><\/li>\r\n \t
    2. Time & leave management – Easy configuration of work hours & leave cycles<\/span><\/li>\r\n \t
    3. Compliance – Never miss compliance deadlines for TDS, PF, PT, ESI, etc\u00a0<\/span><\/li>\r\n \t
    4. Real-time reports & insights – Seamless year-end payroll audit<\/span><\/li>\r\n \t
    5. Customer support – Reliable & prompt support<\/span><\/li>\r\n \t
    6. Employee experience – Declare investments, download payslips, apply for leaves & reimbursements, etc\u00a0 \u00a0<\/span><\/li>\r\n<\/ol>\r\n \r\n

      Level up your payroll management with Open Payroll<\/b><\/h3>\r\nOpen Payroll is India\u2019s most desired<\/span> payroll solution for small businesses<\/span>. The wide range of features available will give you an edge in acing your salary processing \u2014 like never before. Here are some of the reasons why this payroll solution is loved by HR & Finance teams alike:<\/span>\r\n