The Benefits of Outsourcing Your Payroll to an Experienced Accounting Firm

Payroll tasks have probably become more challenging since you started your business and it may be time to consider whether this is something that could better be left to the experts.

The process of paying your employees can quickly become complicated and time-consuming, especially if you have a large workforce with varying pay rates and in different states, leading many business owners to outsource their payroll function to an accounting firm with a dedicated accounting division experienced in managing payroll amongst other things.

Whilst payroll management can seem tedious to do in-house, a professional accounting firm can ensure that your payroll processes are accurate and compliant with both legal and regulatory requirements.

In-house Payroll Management can be difficult to Scale

Payroll management is a time-consuming task that becomes increasingly difficult to navigate as a business continues to grow. There are various state and federal tax laws and regulations to keep up with in order to remain compliant, with significant financial penalties and potential legal consequences for non-compliance. 

At some point, a business owner will need to add dedicated payroll staff either in the form of an in-house team or by outsourcing the payroll function to an accounting firm.

Related: Why its time to Outsource your Payroll

Payroll Made Easy

Outsourcing your payroll management to an experienced accounting firm allows you to leverage the knowledge and expertise of experienced payroll professionals. This reduces your risk of errors and non-compliance. In addition, you can feel confident that your employees will always be paid accurately and on time, regardless of how complex your pay and employment structures may become.

Your prospective accountant will know:

• what kind of employment you offer (permanent, casual, part-time), whether your workers are employees or contractors and how to award the appropriate wages and entitlements to each of them
• what type of wages payroll tax applies to (for example, super contributions, salary sacrificing and annual, long service and sick leave)
• records need to be kept and in what format, and when to send them to the ATO
• taxes you need to pay, and when
• how to calculate your superannuation obligations
• your OH&S and insurance requirements.
  

Single Touch Payroll (STP) Compliance

In order to help Australian business streamline their payroll reporting and compliance processes, employers are required to report to the Australian Taxation Office (ATO) using Single Touch Payroll (STP) software. The intention of this initiative was to support the digital transformation of payroll processes in Australia by improving automation.

Single Touch Payroll automatically provides the ATO with your employees' payroll information – such as salaries and wages, pay-as-you-go (PAYG) withholding and superannuation – every time you pay your employees, regardless of whether you pay them weekly, fortnightly or monthly. Each time you make a pay run, you need to prepare your payroll payment register summary YTD report, along with your payroll entitlement balance summary and detail report. You will also need to send payslips to your employees with all their wage, tax and super information on them, either by email or post. 

While Single Touch Payroll has helped to improve the accuracy and transparency of payroll processes, the initiative still presents challenges for Australian businesses. Compliance management, data accuracy, privacy and security concerns, and system compatibility requirements can make Single Touch Payroll difficult for employers to navigate, again highlighting the value of experienced payroll accountants.

Related: 3 Most common mistakes Employers make as they move to STP Phase 2 Reporting 

Let a professional Accounting Firm do this for you 

Outsourcing your payroll management will leave you and your staff free to do what you’re all best at in your business. With the expanding capabilities of cloud accounting software, contacting your accountant has become easier than ever. With a few clicks of a mouse, you can share your financial data with your accountant, who can easily manage your payroll for you.

Here are four ways that outsourced payroll management can help your business:

1. Uncover employee insights – this is where HR, finance and operations help you learn about your staff, how they work best and what benefits they need to thrive.
2. Drive business performance – how do you create revenue, what drives sales, costs and cash flow?
3. Fuel strategic thinking – changing staff work hours or roles could free up talent that leads to business growth.
4. Keep you organised – well-managed files and data will positively impact other areas of the business.
   
   

Effective payroll management can be used to unearth a treasure trove of information on the health of your business. It can connect other areas of your business and give you insights into how you're performing.

If you are considering outsourcing your payroll function, Azure Group can offer you professional payroll management and accounting services that will free up your time and money.

Our team of fully qualified accounting professionals use best practice accounting standards to integrate every aspect of the payroll process into your business, simplifying your payroll model, providing you with immediate reporting and ensuring compliance with regulatory bodies.

Have you noticed our #FridayExpertTips... here's one that relates to #Accounting

“There are a lot of rules and government requirements around Payroll. The more employees you have, the more complex your payroll usually becomes. Outsourcing your payroll to a professional service firm may give you peace of mind."

 

This blog was originally posted on Jan 17, 2021 and was revamped on Mar 31, 2023