Question

In: Accounting

Chappie is the accountant for Chaps Inc., a local nonprofit organization . Chappie must manage the...

Chappie is the accountant for Chaps Inc., a local nonprofit organization . Chappie must manage the payroll costs so that staffing levels the same even through the funding for Chaps Inc. has been cut due to the pandemic. He is considering outsourcing the payroll to a payroll processing company. What are 2 advantages and 2 disadvantages that Chappie must consider for whether to outsource Chaps Inc. to an outside company? Your submission must be at least 6 paragraphs - one introduction, 4 advantage/disadvantages description paragraph's and one conclusion paragraph. You many assume either Chaps Inc. has a large or small payroll -choose one for your answer.

Solutions

Expert Solution

Guidance to write answers:


Payroll function includes timely and accurately payment of salary to employees i.e processing paychecks, compliances with tax laws regarding state and federal payroll taxes, record keeping and verifying of employee data etc.

Advantages


Outsourcing payroll to third party may prove to be very advantageous as it will be free up time of chappie so that he can focus on other core areas of chaps Inc as given funding for chaps inc has been cut. Chappie can focus on other value added activities.

Payroll Outsourcing will help in compliance of various laws and regulations and thus avoiding unnecessary fines and fees which is very crucial in chaps inc as funding has been cut due to pandemic. This may prove to be very cost effective for chaps inc. which results in saving of time money and efforts.

Disadvantages

Payroll outsourcing may result in added cost to chaps inc which may not be affordable during pandemic. There are some hidden costs involved in payroll outsourcing.

payroll outsourcing results in dependency and loss of control i.e you don't ha e instant access to payroll and you cannot always check it.

Conclusion

Assuming Chaps inc has small payroll so it may not prove to be cost effective for it to outsource payroll to a third party. Seeing the current pandemic situation Chaps inc should not outsource payroll as it will put on an extra burden in form of an added cost.

Hope this helps:)


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