The Downsides of not Outsourcing your Payroll

There are a number of headaches that can occur when running your payroll processes in-house, regardless of whether you are a 10 employee start-up or a well-established multinational. Let’s look at the downsides of not outsourcing your payroll.

The basic infrastructure required to effectively manage your payroll without outsourcing – ranging from computers to servers and the ability to backup the required information – can be particularly costly, and when combined with the maintenance of such infrastructure, the perceived benefits of such internal management of payroll functions are essentially canceled out.

Finding the right software can also be a challenge, as different accountants will almost definitely have their own preferred software and any new accounting staff may take time – and present the possibility of making mistakes – to adjust. Outside of the accounting department, you will also need an efficient IT department to manage and maintain all of this equipment and software, which adds even further to the overall costs (software is well known for being expensive to purchase and update each year as more advanced – and complicated – versions are released). Add to this the fact that researching such products to find which best suits your needs can be time consuming and often frustrating, and you will quickly find that a considerable amount of time has been wasted.

A further drawback is software licensing. For example, if you have spent a small fortune on an accounting software licence for 0-100 employees, and your company then experiences growth, as soon as you have 101 employees, you are no longer legally permitted to use the previously installed package and must once again pay yet more money on upgrading the licence or even purchasing a brand new package.

At the end of the day, although you may be reluctant to outsource your payroll procedures for the perceived benefits of keeping them in-house, at some stage in the future – provided your vision for your company involves development and growth – it is highly likely that you will be required to outsource. When you do make the decision to outsource, you will be getting a dedicated service that has been tailor made to fit your company’s needs and which requires no major reshuffling of your existing infrastructure. Many such services today offer the ability to remotely check the status of your payroll, and also include a wide range of other benefits that make the whole process that much more rewarding for all parties involved.

If you’re interested in outsourcing or have any questions please don’t hesitate to contact us at

You might also want to check out our cloud payroll solution PhilPay

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