Whether it’s outsourcing payroll, human resources, or anything in between, outsourcing can be of strategic benefit to conducting business. But deciding to outsource some components of your business can also bring additional risk to your core activities, and the road you take to making that decision can often be tricky to navigate.
When deciding whether to risk outsourcing elements of your business, it’s smart to consider alternatives to traditional outsourcing that are going to give you greater control of the overall process without getting bogged down in the nitty gritty.
SmartPayroll isn’t a conventional outsourcing service. Using Smartpayroll you can keep control of your payroll but outsource the time consuming bits; such as paying staff and filing IRD returns. With SmartPayroll you can pay staff quickly without the expensive fees of typical outsourcing vendors, and with the certainty that you’re adhering to all your legal and tax obligations. See our how it works page for more information.
When To Outsource
Knowing when to outsource is going to depend on your industry but generally you’ll need to consider several things:
- Is this task wasting time or energy?
- Is this task outside of my core business activities?
- Could this be done cheaper by someone else?
- Is this draining resources (time, money) that could be better used elsewhere?
- This doesn’t require in-depth or specialised company knowledge, could someone else’s company do it for us?
If you’ve answered yes to one or more of these questions then it’s definitely time to consider outsourcing some aspects of your business.
What Is Payroll Outsourcing?
Payroll is something that all businesses, big or small, need to do. No matter who manages your payroll there are always going to be challenges, and sometimes expensive ones, that need to be addressed.
New Zealand payroll outsourcing vendors are usually in the wider business of outsourcing, taking on additional things like human resource management, financial accounting, and even legal advice on these matters. These providers tend to take on a lot of clients, and deliver streamlined, reliable payroll services, with no tailored components.
Technological advances have seen cloud and online based payroll applications come to the fore. By using an online payroll service like SmartPayroll you’re going to have many of the benefits of a traditional payroll outsourcing vendor, but with all the control and visibility that you get by doing it in-house.
SmartPayroll makes calculating employee pay easy, and generates detailed payslips for your staff without you having to spend hours filling in all the details nor trying to delve into the depths of the latest tax reform. By semi-automating the payroll process you can rest assured that you have an all-encompassing view of your business without having to spend hours drowning in numbers or staff leave calendars.
When Should I Consider Outsourcing To An Online Payroll System?
Tax reform, timesheeting, legislative changes, staff turnover, leave and public holidays can all complicate your in-house payroll processes. On top of all of that, there needs to be a secure way of managing all this information and keeping yours, and your employees’, information confidential.
Outsourcing your payroll is going to cost, either time or money, and the bigger your business gets the more it’s going to cost. But if you want to be assured that all of your payroll responsibilities are met and that you’re operating under up to date rules, regulations and specifications then perhaps outsourcing components of your payroll is going to be a suitable choice for your business.
When you use SmartPayroll you’re going to feel at ease – a team of payroll experts, our angels, are ensuring that your payroll obligations are taken care of and you can deliver a more reliable service to your employees and business accounts.
SmartPayroll’s cloud based payroll makes payroll easy; eliminating the stresses and hassles of traditional payroll by making it accessible, fast, easy, and secure, from anywhere. All of your employees’ records will be kept secure, and stored in our cloud based software you aren’t going to lose any valuable information if your office computer dies because you can access your account from anywhere, using any device, any time.
Outsourcing Payroll – Challenges For Small New Zealand Businesses
For a small business, outsourcing payroll can be an expensive endeavour. Especially when you’re already paying for other vital expenses like business insurance, rent, equipment, and plant, before you see a good profit after tax. It can also mean reducing your autonomy as a business owner, having to hand over control this aspect of your business to someone less invested in its goals and successes.
This can also be where issues with communication start to crop up – if your payroll expert isn’t part of the day-to-day goings ons of your business, then they’re not as responsive to a staff member leaving or starting as someone in-house could be. You’re also going to limit visibility – checking that your payroll is up to scratch and nothing is missing is going to be harder when you have to go through an extra link in the chain before that information is gathered.
Benefits Of Online Payroll vs. Payroll Outsourcing
Online payroll is affordable, transparent, and can grow with your business with minimal additional cost. Conventional outsourcing is generally expensive, and costs are going to rise the bigger your business gets. Typically outsourcing is going to mean losing control of that business function whether you like it or not – and finding a reliable vendor to do that for you isn’t always easy.
Using SmartPayroll’s online payroll system you can:
- have all your IRD returns filed for you
- take care of any KiwiSaver contributions
- handle student loan repayments
- integrate with accounting software like Xero
- save your business money with our affordable pricing
- minimise the time and effort put into payroll administration
- calculate holiday and leave balances to be paid out automatically and on time
Not only that, but you can maintain control of your payroll runs by checking your payroll information anytime, anywhere, with our MySmartPayroll mobile app. Having 24/7 access also allows you to make changes to your pay run at the last minute, avoiding any potential payroll disasters. With SmartPayroll you have all the benefits of outsourcing without the costly fees or administrative delays.
An Alternative Solution To Payroll Outsourcing
When you have all the facts, and your cost-benefit analysis is steering you in a clear direction, making a decision on whether to outsource payroll is easy. But gathering those facts is the hard part. There’s a lot of information out there on payroll tax requirements and guidelines for running a payroll system, but knowing what’s valuable to your business (and what’s not) is something for you to decide.
If you understand the core principles of payroll and have a reasonable understanding of its intricacies – but you’re time poor and can’t afford delays – then taking up an online payroll system like SmartPayroll can work for you. Whether you are new to employing staff, a seasoned employer, or new to New Zealand’s payroll systems, then SmartPayroll can have your payroll compliant in no time. Payroll has never been easier.
Further Reading/Industry Research:
- Accounting Standards In New Zealand -independent Crown Entity responsible for the development and issuing of accounting and auditing and assurance standards in New Zealand.
- Afaanz – provides regular publications on accounting issues in New Zealand.
- Risks of outsourcing finance functions – CPA Practice Advisor