Is Your Payroll Affecting Your Business’ Profitability?

The Canadian payroll and bookkeeping industry has grown significantly in the last couple of years, but many business owners still view payroll outsourcing with skepticism. By choosing to manage their payroll processing internally, however, they pose certain risks to their business’s profitability.  

Here’s how.

Financial Costs

Many Canadian businesses opt for in-house payroll management to save on outsourcing costs. However, this decision isn’t always as budget-friendly as business owners assume it to be.

Comprehensive payroll systems or software are typically quite expensive. In some instances, you may even have to pay a fee each time you run the system or be charged an additional amount when you opt for check printing or add new employees. Over time, these additional fees and can add up significantly and adversely affect your business’ profitability. What you may have thought to be a one-time investment becomes an expensive tool to continue using for payroll management. This adds to your financial costs.

Time Constraints

You know how they say “time is money”? Payroll management affirms that statement, especially when you outsource your business’s payroll processing.

Here’s the thing; payroll processing is a lengthy process. It requires time and effort and isn’t something you can pull off in a couple of hours while juggling various other tasks. The more time you dedicate to managing your payroll system and navigating through it, the longer you’ll have to stay away from participating in profit-generating tasks. Moreover, you may also experience delays because of glitches and IT issues, a challenging interface, or automation errors. These will contribute to you spending more time away from other essential tasks, negatively affecting your business’s profitability.

Margin of Error

Finally, there’s no sidelining the room for error in in-house payroll processing. Making errors on your employees’ payrolls can have several consequences and result in excessive back and forth. This can cost your business both time and money and open doors for other internal or external conflicts.

For instance, payroll errors can result in disputes with employees, directly affecting your business’s productivity and profitability. They may also land you in trouble with the CRA or other relevant authorities. The last thing you want is to deal with major or minor payroll errors, the chances of which inexplicably increase when you manage your payrolls in-house. 

Duggal Professional Corporation offers bookkeeping and payroll services as well as consulting services to help businesses flourish. Get in touch with us today for more details about our accounting consultancy in Edmonton, and outsource your company’s payroll processing.