While payroll is the list of employees and their compensation, it is hardly ever this simple a list. Payroll is a major expense for a company. Falling under the purview of the Human Resource Department or the Accounting section, the process of payroll includes a set of components that can be outsourced to companies specializing in the service or can be handled by cloud-based software. Handling payroll is a necessary, resource-consuming business that is often outsourced due to the advantages of such a setting.
The payroll process includes tracking hours worked by employees and calculating their payments. Then the payments are distributed to the employees via a check or direct deposits. While this is the simplified version of the process, before the payment distribution a lot more can happen. Aspects associated with payroll are medical insurance, social security, record-keeping, and accounting.
Small enterprises easily manage their own payroll system. However, the complexity of the accounting section increases with the growth of the company. Taking care of payroll for a large company with hundreds of employees can become a chore too big for a few personnel to manage. This is when help is needed to tackle this aspect. The help can come in the form of an outsourced company specializing in handling payroll for other firms or using a tech-based solution.
Specialized companies handle the payroll and take over the tasks of paycheque calculation, tax compliance, insurance, and employee benefits. Outsourcing this responsibility to them streamlines the internal workings of the main firm and a large number of employees can easily be paid in time. Depending upon the requirements, payroll companies often have a flexible menu of services. They can be asked to produce reports that ease the accounting process and ensure the firm is working within the legal and tax requirements.
Firms handling payroll for large companies make use of Fintech to make things easier for them. They use software and cloud-based technology to integrate different responsibilities for a cohesive streamlined output.