When you own or are even starting a business, then you have more than once asked yourself this question: “Do I want to make team payments on my own or delegate it to an outsider?” That sounds so easy, doesn’t it? However, when the tax season comes into effect, questions of the employees begin to accumulate, and your spreadsheets become a nightmare, then it becomes real. Fast.
Which is the wiser decision then? The in-house payment method puts you in control, but it also puts extra responsibility on your hands. Outsourcing seems to be less demanding, but is it worth that price?
Well, let us dive into the advantages and disadvantages of each of these two options and you can give me a shout out at the end of it and tell me what suits you best in terms of business.
In House Team Payments: The Do It Yourself Option
Managing team payments in-house means you’re taking on everything from tracking hours and calculating taxes to submitting direct deposits and filing year-end forms. This may seem achievable in case your company is not very huge, and your business processes are not that complicated.
Actually, some owners of businesses would rather have it this way. Why? Since it makes them have full authority over their process. You have knowledge on what is being paid, at what time it is being paid, and to whom it is being paid. Bonus: a big portion of it can be automated with the appropriate software. However, in all reality, it can become tricky very quickly.
What about the case of remote workers in other states or even nations? Or when there is a change in tax laws and you overlook a deadline in filing? The most organized founder may commit an oversight that will cost a lot of money in fines. And unless you happen to be a specialist in compliance or tax codes, you are pretty much learning on the job.
And now the million-dollar question, do you want to really spend your time correcting payment errors when you should be concentrating on expanding your business?
Outsourcing Team Payments: Call in the Experts
So now let us discuss outsourcing. There are services and platforms out there that can handle your entire payroll process from onboarding new employees to making sure taxes are filed correctly and on time.
What is the greatest benefit? Mental calmness. You do not need to worry about meeting deadlines or doing deductions. All this is done by experts who eat sleep and breathe HR, finance and tax rules.
However, Is It Worth Spending?
Here is a thought, all that saves time, less chance of error, and availability of professional assistance makes the outsourcing cost sometimes self-paying. Most of the services also include additional features, such as tax filing, compliance assistance, employee portal, and connections with your accounting software.
If you’re growing fast, outsourcing your payroll can save you from the headache of scaling an internal system that wasn’t built for complexity.
What of Hybrid Models?
Do not want to become completely in-house or completely outsourced? Great news you do not need to. A hybrid model allows you to automate some of the elements of the process using software but retain a level of control.
Or, you may do simple payments yourselves, but pay a service to do tax returns and compliance. It is a best of both worlds kind of deal, particularly when your company is at that intermediate level it is neither a startup nor an enterprise.
It is also flexible enough to enable you to move at your own pace trying out how much of their services you actually need without having to subscribe to a comprehensive service package immediately.
Things To Consider Before Deciding
Still unsure? Ask yourself:
- What is the number of employees/contractors that I pay on a regular basis?
- Do I feel comfortable with taxes and government Filings?
- Can I afford to deal with payment matters and upgrades?
- Do I have expansion plans in the near future?
- Would specialist’s assistance provide me with peace of mind?
These questions will be answered and will give you much about the right direction to go.
Final Thoughts
Team payments is one of those things that are easy to say, until it is not. The bottom line is that as much as you may want to do it in-house or as a service, the fact is that your personnel are paid correctly and promptly. Every time.
No universal answer exists in this case. In the case of certain enterprises, DIY will do. To others outsourcing is a savior. Evaluate your resources, your development horizon and your tolerance to compliance then select the option that allows you to concentrate on what you do best, run your business.
And, frankly speaking, it is always good for business because a happy team, at the end of the day, makes smooth payments.
