Benefits of Outsourcing Salary Management Services for Small Businesses

Salary management in a business is an ingredient demanding paramount importance. It is a complex process of managing the financial records of the employees by dealing with an assortment of affairs viz handling salaries, incentives, bonuses, deductions and net payouts. Traditionally, companies used to get their payroll services done by the Accounts department, but the new age discerns outsourcing as an out-and-out remedy to do away with the pointless hassles.

Salary Management contains a variety of functions:

  • Modelling of organisation compensation policies such as leave encashment policies, flexible benefits, etc.
  • Defining components such as fixed pay, variable pay, DA, HRA, OTA, etc.
  • Assembling information from other departments regarding leave and attendance, mid-year salary revision, etc.
  • Deriving the net pay after adjusting taxes and other necessary deductions.
  • Paying out salaries to employees via cash, cheques or mostly bank transfers and publishing payslips.
  • Complying to the statutory norms, deducting TDS and other social security schemes such as PF, ESI, etc according to the applicable tax brackets and then issuing Form 16 to employees for filing individual tax returns.

Why open a can of worms?

How do you feel when you are not getting your salary on time or the incentives or bonuses promised to you are missing? Horrible isn’t it? Salary paid with precision and promptness fuels the motivation within the employee to perform consistently. Conversely, erratic and capricious pay cycles can demoralise the staff, blemishing the otherwise long-established clean reputation of the company.

Outsourcing Perks:

Outsourcing your payroll functions help you gain new business insights and also aids owners to focus more on strategic functions and optimize the other important aspects. The services apart from salary management include a profusion of offers such as maintaining the HRIS, tracking the attendance and leaves issued, accurate pay calculation, employee life cycle management from onboarding to exit, implementing best in class compensation and compliance practices, etc.

?     Saves your time:

The steps in payroll processing can be extremely time-consuming and keeping track of the shifting laws and regulations can be frustrating. Any trivial error in the process might charge an amount unreasonably high. Since time is a vital factor for the growth of SMB’s, so outsourcing seems to be a viable option for small businesses as it helps the owners to free up their rather busy time.

?     Cut down cost:

Even though you have a handful of employees working under you and you have the notion that there’s no need to outsource your payroll processes, then let me correct you. Payroll outsourcing can actually help you save money.

Non-adherence to the rules and regulations and incorrect filings might result in heavy fines and penalties. Additionally, having a finance staff for processing payroll with a dedicated workspace, lighting it up, increasing salary rates, manual input errors are painstaking. So, get it outsourced and sit back peacefully before it drives you crazy.

?     Tech-savvy:

When outsourced you are assured that the prodigies are getting your job done with à la mode technology and laws are adhered to by the book. The changing rules and regulations triggered in whopping numbers, every year and the endless compliance requirements for small businesses alone might leave you shaken to the core. With the growth in business, rising count of employees and their desire to access payroll information online, use of efficient technology is the need of the hour.

Pick the finest:

Now before you jump into this bandwagon, you need to consider the following points:

  • Since you will be sharing a lot of confidential employee data with the service provider, you need to be assured of their reliability and that the particulars are in safe hands.
  • Check for professional licences, qualifications and experiences they possess. Once-over the previous track records of service that they had been delivering.
  • How much are they charging? If it’s in line with standard market rate? Are they filing taxes for you, and in case of wrong filings, are they assuming the penalties themselves?
  • What will be the turn-around time? Are they flexible and do they provide complimentary service offers as well?
  • Will they implement new technologies with the passage of time and growth in the number of employees.

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