5 reasons why companies outsource payroll in South Africa

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outsource payroll in south africa

The process of payroll includes not only the due payments to employees but also other work benefits such as with-held taxes and bonuses. Companies might think to outsource payroll whence they realise that keeping track of payroll records becomes a hefty task. An insight in the Emerald journals showed there was an efficiency gain with additional tasks of payroll being outsourced.

Why outsource payroll services?

This is the question you may be asking yourself: In-house payroll departments have managed the job so far. Besides gaining in the efficiency of your tasks, which allows you to work on important tasks surrounding growth factors in your business, what are the other benefits that you could expect if you outsource your payroll services to an accounting firm? 

Here are the 5 reasons to outsource payroll:

Less expense

Every company wants to increase its profit margins, and a factor of that equation includes decreasing expenses. 

Reduce staffing & training costs

The choice to outsource payroll comes with the benefit of the service without the salary. There is no need to pay new employees to do a task, whilst later requiring means to increase their salary as compensation.

Accurate & reliable service

The consequence of mismanaged and untimely paid dues leads to a decrease in overall productivity amongst employees. Their attitudes and motivations potentially stand the risk of worsening. 

Excludes guesswork

Companies that outsource payroll have ease of mind. Their employees are paid promptly and everything looks seamless. That comes from experience and time invested in companies by outsourced accounting firms. They have had to manage many payrolls prior to yours, and have had the insight to tweak the service to your company, no matter the size. 

Their accountants are more so compliant, having to manage more accounts and know the effects of accurate reporting later down the line.

Access to resources

Every company wants to remain compliant, and having to keep in line with government regulations could often thin out cash flow and resources. There is no need for spending funds on purchasing & maintaining accounting software when you choose to outsource payroll.

Accounting software helps with tax-compliant invoices

By design, the use of accounting software enables a greater degree of compliance. Automated technology has the potential to convert quotes to invoices.

For companies with large sales volumes and overseas clients, the benefit of outsourcing payroll to firms familiar with laws concerning electronic invoicing and the latest software is obvious. Non-compliance penalties for invalid invoices are a burden none wants during audits. Such software voids this problem, whilst solving scheduling conflicts.

Saves your time

Productivity beats busyness, and if you’re spending time on supplementary tasks then your time and money are greatly underutilised. Every company should have the flexibility to put their efforts in the right place and could afford to when they outsource payroll services.

No training! Less admin! 

Besides training costs, the time taken from upskilling employees takes away from work hours and later takes up time in their schedule. Outsourced accounting firms bring payroll services along with automated software, and thus a faster billing process overall. No need to wait on payment administration. Any reasons to not outsource payroll services should vanish.

Secure & confidential

When setting up your payroll, the concern of security adds to the hefty process. Once-off security measures could lead to an overall long-term undermining of the payroll process, even if you’ve managed to automate the system. 

Less risk

 If your company chooses to outsource payroll to an accounting firm, they also mitigate risks. Accounting firms are aware of this responsibility and avoid any chance of faltering payments. Since the payments and benefactors belong to an external company, they take care to validate details at each part of the process. Each salary paid is treated with measures to ensure there are no mix-ups.   

Whilst there are numerous reasons to outsource payroll, the fact remains that such an essential service should be handled by professional accountants. If your company needs time, access to accounting software or intends to save on costs, the first task to be considered should be payroll service. Clearing this task from your accountant’s hands alleviates stress and gives you a greater degree of compliance with regard to eFiling.

Information about the authors, publication, and publisher

Picture of Author - Arnaud Brunel

Author - Arnaud Brunel

After a 15 year long career in International Banking and Compliance, Arnaud launched multiple businesses in Cape town. He still heads 2 of these businesses today in the Digital Marketing Industry with Brunel Studios and in the Financial Industry with Thryv.

Picture of Publication & Publisher - Thryv Accountants

Publication & Publisher - Thryv Accountants

Thryv accountants is a private accounting company that focuses on outsourcing of the financial functions of small and medium companies in Cape Town and other regions of South Africa.

The publications on this website are for information purposes only. They are based on our professional opinion.

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Write to us at admin@thryv.co.za or give us a call on (073) 142-1010.

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