With the emergence of new and different companies, payroll services have been an in-demand product in the business world. Having the ultimate goal of gaining the highest productivity at the lowest possible cost, business outsourcing has quite been following the trend alongside tons of technological advancements. Letting a third-party provider handle the more meticulous and rigorous works of human resources can become an ideal way of focusing more on the company’s goals.
What is Payroll Services Outsourcing?
In the past few years, the Philippines has invested heavily in Business-Process Outsourcing (BPO) companies to operate the complexities of administrative work. Included in this practice is the outsourcing of payroll services which is a valuable alternative to the manual in-house payroll processes. It basically lets another organization handle important information about the company’s employees and lets them compute their payroll.
Furthermore, this process offers an attractive, cost-effective, and efficient way of handling a company’s payroll which usually takes too long to accurately acquire the data — that is why it is much considered a headache for the company’s human resources management. In this case, It also involves a simpler process in calculating the compensation and deductions given to employees. It includes the filing of taxes in the government and being up-to-date with the change in tax policies of the country’s Bureau of Internal Revenue. It is indeed significant especially for companies that have a huge number of employees as it eases the administration into providing paychecks to their staff.
The HRIS and Payroll Services
The human resource information system (HRIS) is a software solution that gathers and keeps the information about employees of a company. It provides and tracks information about activities including human resources, accounting, and payroll.
In outsourcing payroll services, the HRIS is included in the activities that the provider may supply in order to maintain the employment records and collect metrics and compensation. It increases efficiencies and access to important information. It also simplifies human resource management processes, including payroll, which benefit the administration. In its payroll module, it computes for the work hours and the attendance information which also automatically deducts taxes to provide necessary paychecks.
Why is it better than the in-house process?
As mentioned before, outsourcing is a valuable replacement for the manual payroll processes of companies. It is an easier way to calculate information and may let the business increase its overall profits. Through this, the company can utilize and maximize the human resource services outsourced which can save the company some costs. The following are some reasons to resort to payroll services outsourcing:
- It reduces the total overhead costs of a company. With in-house processing, its manual method of computation involves a longer time in gaining accurate information about varying paychecks. Having this in mind, paying the company’s staff is more costly than having it outsourced.
- It provides the company an opportunity in focusing more on its business goals. With the shorter amount of time in the calculation and having a third-party organization handle it, the company can centralize their attention more on their actual goals rather than determining the inconsistencies of the system.
- It reduces the complexity of payroll processes and productivity for other employees. Organizing payroll is definitely a complicated task so it burdens the people from the company when they encounter problems. It also increases productivity as the company would worry less about the accuracy of the information.
- It involves a simpler process and is more reliable and accountable. With the government’s changing tax policies, inaccurate calculations may lead to delay in manual processing. However, outsourcing payroll is great since the handler can revise certain data because of its simplicity, through the HRIS, which should provide more accurate results. In this way, the company can avoid penalties.