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6 Myths About Payroll Processing and Outsourcing Debunked

Client Advisor Team Leader
March 20, 2024

However, several business owners hold some myths about payroll processing and outsourcing. So, through this blog, let us debunk the six most common myths about the payroll outsourcing process.

Myth 1: Only Large Businesses Need Payroll Processing and Outsourcing Services

On the contrary, small business enterprises also benefit from payroll processing and outsourcing. A third-party payroll service provider has technology, reporting capabilities and cloud-based platforms that these small enterprises don’t have. The payroll service providers have teams of highly skilled employees specializing in payroll. Small and medium enterprises can leverage the technological capabilities of payroll service providers and get help with automatic tax filing and payments, direct deposits and more.

In addition, there are many payroll outsourcing service providers that explicitly cater to small and medium business enterprises. Moreover, preparing your HR for scalability becomes difficult when your company grows, but payroll outsourcing company offers quality services and makes it very easy to scale.

So, it is not the business size that should determine whether you need the services of the payroll service providers, but the benefits you get should determine it.

Myth 2: Managing payroll in-house is cheaper than payroll processing and outsourcing

Rather than being expensive, payroll processing and outsourcing is cost-effective. However, businesses do not realize that the actual cost of payroll processing in-house is not limited to the salaries of in-house payroll processing employees but involves ancillary costs. The costs involved in managing payroll in-house include:

  • Employees and all associated costs such as recruitment, hiring, training, etc.
  • IT support
  • Payroll software
  • Security

So, a global payroll outsourcing company can help you save payroll-related staff costs, time and money spent on keeping pace with rapidly-changing legislation, costs of running and maintaining a payroll software system, expenses incurred on IT support.

So, rather than being expensive, payroll solutions are cheaper and enable you to focus your energy and resources on core business activities. A payroll outsourcing company delivers true value and a tangible cost-saving and ensures you stay compliant every time.

Myth 3: Data Security is an issue in payroll processing and outsourcing

Many businesses and their finance directors fear that they put their data at risk on hiring a payroll outsourcing company. This is because they consider that the payroll data stored outside their organisation is vulnerable to access or loss. On the contrary, the data of a business is 100% secure.

The third-party payroll provider encrypts all data and ensures its security. In fact, they invest heavily in technology and have robust disaster recovery systems. In addition, the third-party outsourcing company understands the sensitivity of financial information and, therefore, meets and complies with all legislation related to the Data Protection Act. Moreover, to avoid data security breaches, they have a stringent quality check on data safety and fraud.

Myth 4: Transitioning to payroll processing and outsourcing is a nightmare

Companies are worried that payroll processing and outsourcing will pose challenges and disruptions. However, it is simply a myth as a third-party payroll service provider ensures that the process to transfer payroll processing is smooth. In addition, they give you clear information about the process and have a dedicated payroll manager for each client to ensure the process is smooth.

The process of moving payroll may look daunting, but it is actually painless. Furthermore, it offers long-tail benefits such as streamlined functionality with cloud computing, more time to focus on core business activities, increased compliance, cost-effectiveness, etc.

In addition, businesses believe that they will have to adjust their systems according to payroll service providers’ solutions. But today, payroll service providers have fully integrated systems and processes designed in a manner that these can go with the tech stack of businesses rather than requiring organisations to fit their tech stacks as per payroll service providers.

In addition, to make the payroll transition process smooth, the payroll outsourcing company invests heavily in the transition process. They also ensure the entire migration process is hassle-free.

Myth 5: The business will lose control over its payroll function

Another common misconception is that on outsourcing payroll solutions, they will lose financial control or be left out of the loop. On the contrary, payroll outsourcing company provides customized and tailor-made solutions that cater to your specific business needs. So, if you still want to write the cheques yourself, you can.

In addition, if you need customized reports, the third-party payroll service provider can also run them for you. You have complete access and control to your payroll data.

Furthermore, payroll service providers assign a dedicated business manager to your account. The person provides you with every piece of information you need, like your own in-house payroll manager. As a result, the payroll processing and outsourcing process are entirely transparent, and you stay in complete control of the payroll functions that matter most to you.

Myth 6: Payroll Processing and Outsourcing impact employee experience negatively

This is a common payroll outsourcing myth that one can hear about payroll processing and outsourcing. Businesses believe outsourcing payroll solutions will create barriers amongst themselves and their employees, but in reality, it is the opposite of this.

The fact is that payroll providers work closely with business organisations and improve the employee experience. The third-party payroll service providers offer a personalised experience to employees by giving them access to employee self-service software to access their payroll information.

The self-service software enables employees to have secured tiered access to their payroll data, update investment declarations, paid time off, raise queries online, download payslips and more benefits.

Above all this, assurance that they will receive their payroll accurately and timely and the taxes will be filed on-time boosts the morale and productivity of employees. Moreover, the payroll service providers let employees get access to their payroll information from anywhere and at any time.

How Payroll Processing and Outsourcing Service Providers Will Help Businesses?

Payroll processing and outsourcing service providers have expertise in managing payroll functions. They simplify payrolls through end-to-end payroll management services and help businesses automate payroll.

Payroll service providers also help companies remain compliant and delight their employees with accurate and on-time payrolls. In addition, third-party payroll service provider provides businesses with customized payroll solutions. The services offered by payroll service providers include timely payroll processing, investment proof verification, reporting and analytics, tax filings, expenses management, coordinate/project management, data collation etc.

Benefits of Payroll Processing for Businesses

Businesses get many benefits from outsourcing payroll services, such as

  • Prioritising core business

    – Payroll is a non-core function, and outsourcing payroll enables companies to focus on core business activities.

  • Save Time

    – Payroll processing needs time and attention irrespective of the strength of your employees. The time spent in payroll processing and management can be efficiently used by businesses to focus on core operations.

  • Expert Access

    – Payroll service providers specialize in payroll processing and have years of expertise. This is especially helpful if you operate in multiple jurisdictions and need an expert having in-depth knowledge of local rules and regulations, including payroll tax laws.

  • Regulatory Compliance

    – Staying compliant is a must for every business. Third-party payroll provider has in-depth knowledge of international labour laws, immigration, anti-discrimination, insurance and tax laws. They help businesses stay compliant and meet all legal requirements and help you avoid penalties or unnecessary audits.

  • Cost-Savings

    – Outsourcing payroll is cheaper than managing payroll in-house. The companies are not required to invest in technology, equipment, manpower or other resources.

  • Employee Self-Service Features

    – HR leaders believe that self-service options save time and money. It enables employees to handle tasks such as printing tax documents, updating benefits and tax forms, updating personal information, submitting time-off requests and viewing payroll information.

TopSource Worldwide Payroll Processing and Outsourcing Service Provider

TopSource Worldwide is a trusted payroll service provider that helps companies streamline their payroll processes by providing them with end-to-end payroll management solutions. We have more than 18 years of experience providing HR, payroll and compliance services to global clients across industries. TopSource Worldwide serves various industries like IT-ITES, manufacturing, pharma, BFSI, engineering services and consulting, and shipping.

We provide our clients with flexible, scalable, secured and cost-effective payroll solutions. As a payroll outsourcing company, we simplify workflow, whether it is on-time payment processing, statutory filings and compliance, reporting and analytics or expense management.

Our skilled and experienced staff have rich domain understanding and work as a part of your team. In addition, we efficiently manage payroll processes to enable you to focus on your core business. Furthermore, we offer customised and tailor-made solutions that cater to your specific business needs.

TopSource Worldwide offers a complete suite of employer services and allows businesses to employ and pay the staff promptly, consistently and compliantly, locally as well as internationally, according to your business needs.


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Nena Petrovic
Client Advisor Team Leader
Nena Petrovic is the Client Advisor Team Leader at TopSource Worldwide, a leading Global Expansion services provider. She oversees and guides a team of client advisors, who communicate and collaborate with clients effectively. She is responsible for ensuring the accurate and timely processing of client invoices and payroll, as well as developing strategies and maintaining a client-centric approach.

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