Presented by PaySpace

The financial benefits of adopting a cloud-based outsourced payroll solution

By Sandra Crous, Managing Director at PaySpace, a leader in payroll and HR software

Cloud computing brings many benefits to organisations in every industry. It enables them to set up what is, in essence, a virtual office to give them the flexibility of connecting to their applications and networks from anywhere, at any time and on any device.

Cloud solutions are more flexible, offer agile service, there is no hardware to maintain, no manual backups to keep on top of, no more paper-based processes, and most importantly, no large capital outlays.

One of the most compelling reasons for companies to adopt a cloud-based payroll solution is that by outsourcing their payroll, they do not need to pay license fees and they do not need to pay for anything they don’t use.

Moreover, with a good outsourced payroll provider, this is taken a step further as they will own their software, making them the owners, purveyors and designers.

There is no additional software cost when using their services, because the software already belongs to them.

This is a huge differentiator that truly sets these operators apart from their competitors.

The top cloud payroll providers will also have full command and control of their software, and therefore a far larger degree of influence when it comes to any possible adaptations in the software or additions to it.

These players have direct say in this, as well as direct access to the people who make these decisions, which ultimately allows them to add input on critical decisions aimed at benefiting their customers.

Another point worth mentioning is that employing an outsourced solution improves the accuracy of the payroll, which ultimately leads to money being saved.

If no mistakes are made within the payroll process, it lessens the chances of paying for any elements that you might not strictly have to.

This leads to a secondary tier of savings either as after-costs involved when it comes to making additional payments, or for any fees that the customer might not be able to recover.

Additionally, when your payroll is compliant you do not end up overpaying on tax, UIF or SDL.

This applies to tax efficiency as well. Using an outsourced solution guarantees that you do not apply tax at the incorrect rate, or pay more than you strictly should be paying.

This is evident in the aftermath of the Covid-19 pandemic, with various initiatives such as ETI and TERS aimed at helping organisations who fell into financial hardship during this trying time.

Using an experienced payroll outsourcing solution removes any potential for errors as the provider will handle the entire process – from start to finish – helping customers navigate the murky waters of this highly complex process.

Bear in mind that there are additional, highly specialised areas within the payroll arena.

One example is organisations that specialise in Workmen’s Compensation Assessments only.

They examine what a particular organisation has been reporting, its risk category and suchlike, and once complete, ensure that assessments are done correctly resulting in direct cost savings.

One of greatest benefits of having a good payroll outsourcing partner is that they will have experts within their circles who know who to bring their customers into contact with.

All of the top players have been in the industry for a long time, so when it comes to certain highly specialised areas, they will over the years have developed a list of highly accredited specialists.

Another big plus is that many of these specialists will not bill customers a flat fee but rather only charge a percentage of the savings they can quantify through their services.

Finally, let’s not forget that cost is a relative concern. Cost should not necessarily only be equated to rands and cents.

There is a great deal to be said for gaining efficiency and avoiding pitfalls and pain points, which, while it is hard to measure quantitatively, can become blatantly clear when there’s a notable reduction in effort or suddenly having dramatically fewer challenges to deal with.

Imagine using a service that guides these elements with foresight and helps to avoid hassle in the long run.

There’s a lot of intrinsic value in this, as there is value in simplicity, in forward planning and in anticipation.

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The financial benefits of adopting a cloud-based outsourced payroll solution