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This article was written by our valued partner ADP, who helps Innovia Co-op members simplify their HR and Payroll processes every single day.


Top reasons to outsource payroll

Business owners who place a high value on their time and peace of mind often end up outsourcing payroll. By partnering with a full-service provider, most of their payroll responsibilities – wage calculations, tax withholdings and deposits, reporting, etc. – are taken care of for them.

Community management companies who don’t have the administrative resources or the expertise to run payroll on their own may want to seek professional assistance from a third party. Other reasons for outsourcing payroll are that it helps:

1. Save time

When employers take payroll off their plate, they often have more time to focus on other initiatives important to growing their business, such as product development, customer service and sales.

2. Minimize payroll errors

Payroll providers automate many of the labor-intensive aspects of payroll, thereby reducing the mistakes that commonly result from manual calculations and data entry.

3. Improve security

Outsourcing payroll to a reputable provider that invests in state-of-the-art technology and has redundant backup and multiple server locations can help employers safeguard their confidential data.

4. Maintain compliance

Payroll providers stay on top of changing government regulations so employers don’t have to and will often take the lead in filing all paperwork necessary for compliance.

5. Integrate data

When payroll is fully integrated with time and attendancebenefits and other HR applications, it improves data accuracy and makes it easier to access information through single sign-on

6. Facilitate employee self-service

Full-service payroll typically allows employees to view their pay information, log their hours and manage their withholdings – all from a mobile device.

7. Reduce costs

Payroll providers charge fees, but when compared to the cost of the fines and penalties that can result from mistakes, outsourcing payroll may actually save businesses money.


What features do payroll outsourcing providers offer?

Payroll outsourcing providers that have the knowledge and technology necessary to produce accurate, timely results generally offer these key features:

  • Payroll processing that integrates with an accounting system, if needed
  • Payroll tax filing
  • Employee self-service anytime, anywhere, from any device
  • Employee pay options, including direct deposit and paycards
  • Year-end processing, including Form W-2, Wage and Tax Statement
  • Wage garnishment processing
  • Payroll and custom reporting
  • Employee recordkeeping
  • New hire reporting
  • Accessible client support


How to choose a provider for outsourcing payroll

Knowing what to look for in a full-service payroll provider can help smooth the transition, minimize disruptions for employees and preserve peace of mind. When assessing potential partners, employers generally follow these steps to ensure that outsourcing payroll is a success:

Determine requirements
Multiple pay frequencies and employee classifications can make payroll complicated.

Address compliance
Adhering to multi-state and multi-national jurisdictions adds another layer of complexity for payroll providers.

Evaluate vendor history
Reputable providers tend to have stable ownership, strong finances and a track record of successful implementations.

Look at peer reviews
Industry analysts and clients who have used the provider’s payroll services can provide outside perspective and help validate decisions.

Secure stakeholder buy-in
Outsourcing payroll is often easier with the full support of employees and senior leadership.

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