For businesses, their size, budget, goals, and number of employees impact their decisions on whether they should select a payroll service (outsourcing) or subscription cloud-based payroll software.
In addition, the selection between both options also depends on what you are trying to achieve. For example, if your goal is to save time for HR professionals, using third-party services may seem a good option.
On the contrary, when the end goal is to protect all data inside the company including employee data, payroll calculations, and attendance records, then using payroll software in Pakistan is the ideal solution.
The choice is solely yours.
Between payroll outsourcing and payroll software, there are pros and cons for both options so select the one that you think will suit your company the most. Let’s explore the advantages and disadvantages of each approach to help you make an informed decision:
There are plenty of advantages to using dedicated payroll management. Some of these are explained below:
Any good payroll software can be a less costly yet an effective option. This is especially a great option for small and medium-sized businesses with limited budgets. Many HR and Payroll software solutions offer pricing plans so that businesses can select the best option for them.
2. Control – Full Power
Using payroll software gives you full control over your payroll process. If you are opting for the payroll software then you will be able to have the power to see, modify, and finalize the following:
- Input data (employee data, onboarding, attendance tracking, and more)
- Make adjustments (offer relaxations, leaves – both paid and unpaid, and more)
- Generate reports as needed (from pay slips to printing rules and regulations)
Some payroll software solutions also allow you to customize it to fit your specific needs and adapt to local tax and labor laws. This way, if you are taking your business across borders, then you have the ability to change the tax laws as well as labor laws in the software according to the country you are going to.
As not all companies have the same requirements, HRMS software having the payroll featurecan also offer the option of customization to make sure that the needs of the clients are met remarkably. You can add an extra layer of security or define the hierarchy that your company wants to follow in making decisions.
4. Real-Time Access
With cloud-based payroll software, you get real-time access to your payroll data. With the help of real data, you can easily track and manage employee information anytime.
To be honest, using payroll software has always been a big help for most companies but it does have a few drawbacks that you should be aware of.
1. Learning Curve
Using payroll software requires some level of expertise and learning. It may take time to set up and fully understand the software.
Solution: Usually software comes with a manual along with a small training session where the experts help the new users in understanding the process in detail. You can also select a demo session before buying the software.
2. Compliance Responsibility
You are responsible for ensuring that your payroll processes are compliant with local regulations, which can be challenging without expert knowledge.
Solution: This issue is a big one, yet you can easily take the help of professionals like lawyers who can offer you consultation and make the compliance process easier.
Let us move towards the option of third-party outsourcing for your payroll management.
Advantages of using Payroll Services (Outsourced)
1. Expertise and Compliance
Payroll outsourcing companies in Pakistan have experts working for them who are well-versed in local tax laws and regulations. They can help in making sure that your payroll is compliant with government requirements, reducing the risk of mistakes ending in possible huge costs.
Outsourcing your payroll can free up your time and resources, allowing you to focus on core business activities. This can be particularly beneficial for small business owners who wear multiple hats.
Usually, the payroll providers have secure systems to make sure your data is safe. In other words, they help in reducing the risk of data breaches. This is extremely important as if they do not offer this service, we won’t recommend using it.
Disadvantages of using the Payroll Services (Outsourcing)
Just like other options cost is one of the biggest disadvantages of using third-party payroll managers. This cost may be a significant factor for small businesses that are working with really tight budgets.
In addition, they do not have the option of giving a trial period which you get when you opt for using any HR and Payroll software in Pakistan for your business.
2. Limited Control:
When you outsource payroll, you will feel that you get to have lesser control over the whole process directly. You are hence forced to rely on the service provider to handle everything accurately and within the budget.
3. Communication Challenges
There are also chances that the third party offering payroll services does not understand your company’s specific needs. In addition, there is also a chance that the payroll outsourcer is not available to discuss any challenge. it means time and effort are not always productive nd also wasted. This can be a cause of concern for urgent matters like payroll.
The decision between choosing payroll outsourcing or using payroll software in Pakistan depends on your business’s specific needs, budget, and comfort level with payroll processes.
Small and medium-sized businesses with limited resources might find payroll software to be a cost-effective and flexible solution. On the other hand, larger businesses or those with complex payroll needs may benefit from the expertise and compliance assurance offered by outsourcing providers.
Some businesses may have in-house persons to tackle the payroll, whether small or large. So, it usually all depends on your requirements. Eventually, it’s important to carefully consider the advantages and disadvantages of each approach before making a decision.
Lastly, if you are more inclined towards having in-house payroll software for your company, we recommend HR and Payroll software by Resource inn (increasingly getting the fame it deserves). However, if outsourcing seems perfect, then Payroll Outsourcing & BPO Services by Esquire may be the right option for you.