Reasons to Outsource Payroll Processing

Employees need to be paid on time to keep a business running efficiently. The payroll—even though it’s a non-core function that adds little to zero value to a business’s brand image—remains a vital process.

But processing payrolls for employees can be time consuming, taking up hours to days, depending on the number of employees and the size of a business. The more employees a business has, the more time it will take to process the payroll; time that can otherwise be spent on making strategic decisions for the company.

For a business that’s operating on a set budget and has tight deadlines, manually processing the payroll is not an ideal situation. Research, as well as accounting and finance experts, have endorsed outsourcing payroll processing because of its proven benefits.

A few of those benefits are listed here:

Time Saving

Hundreds of hours are required to gather, sift, and process data. From keeping track of timestamps, schedules, work hours, earning ratios, holidays, and overtime to understanding ever-changing state and federal laws regarding taxes and insurance deductions of, the process is nerve-wracking and never-ending.

Small and emerging businesses don’t have the luxury to hire tens of people for just payroll processing as outsourcing services do. This can prove extremely challenging for an in-house payroll processing team comprising one or two members.



Payroll processing needs to be efficiently handled, as the accounting team has a deadline by which they need to hand out paychecks or make online deposits. Some companies pay their employees a week before the end of the month, while others pay them a week after the start of the month. Whatever the case, deadlines must be met. What happens when an accounting person gets sick or has an emergency and needs to take a few days off? Your whole business will get affected, as employees will need answers regarding why they haven’t received salaries.

Outsourcing payroll functions frees you from crises that are bound to happen sooner or later. With multiple employees working in outsourcing accounting firms, they can take over for each other in case of tight deadlines.

Cost Reduction

For a company which has 10,000 to 20,000 employees, in-house payroll processing can prove to be cost-effective. Most businesses aren’t that huge, though, so processing payrolls in-house will greatly affect the financial situation of a business.

Even with payroll software, the costs of maintaining and understanding the technicalities of software aren’t viable for small business. Outsourcing can save 20 percent of finances that would otherwise be spent on an in-house accounting team.


With the high stakes and complex steps involved behind handing out a simple check, in-house payroll processing has quickly declined in the US. The outsourcing market is growing, as companies don’t have to care for late filings and penalties in case of a missed deadline anymore.

Business based in Boca Raton and Delray Beach, Florida can contact Accounting and Business Solutions (A&B), to outsource their accounting, bookkeeping and business consultation needs in a professional manner and at affordable rates. A&B Solutions also provide their services throughout the US remotely and can be contacted via website, email and call.

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