When Should You Outsource your Payroll?
Yes or No to outsourcing? – that’s the question. As a founder and business owner, monitoring the growth of your company is as fascinating as collaborating with others. Whether you are working as a start-up or a settled business, the question always arises at some point – should you outsource? And most importantly, when?
You must weigh the benefits and risks of outsourcing – financially and operationally. Outsourcing is a solution to a problem, but you get a lot of headaches when misused or mismanaged. That’s why the most important question is not whether you should outsource, but when actually.
Gone are the days of the lone ranger model – today you need to outsource some of your businesses, with people specializing in their skill sets. If you own a business, at some point, you will meet outsourcing crossroads.
When considering a particular task or role to outsource, ask yourself:
- Is this an unproductive use of work, time and energy?
- Is it outside my core business activities?
- Is it cheaper to do this than to keep it in-house?
- Can you make good use of the existing resources elsewhere?
- Is this standard practice that does not require deep, specialized organizational knowledge?
If you answered yes to 2 or more, you should start thinking about outsourcing. It is a great business option for everything from payroll and accounting to delivery and preparation. Outsourcing will allow you to reallocate and invest your core resources into higher ROI activities.
It is important to note that outsourcing ALL functions are not essential for the profitability of your business – if you are an SME, your personalized customer service may be one of your USPs. You rely heavily on customer service to build relationships with your clients and hence, it is best kept in-house.
Our customers use our payroll outsourcing services because their primary business is not payroll – they don’t want to spend too much time learning how to calculate correct salary, deduct right taxes, adjust annual leave, deal with software issues and comply with various rules of the Government. So if your business has functions that are secondary to your core business – it may be time to outsource.