More and more businesses are considering outsourcing payroll as they look to improve efficiency and cut costs. Smaller businesses are good candidates for switching to payroll-service providers.

Big companies need and can afford payroll departments, but little businesses may not need to have people specifically charged with paying everyone else. By farming these services out, they often can better devote their manpower elsewhere while saving money and improving accuracy and efficiency.

Online business directories will guide you to scores of companies that provide payroll and other accounting services.

Here are some of the advantages that they can provide:

• Cost: It's very likely that your company can save money by outsourcing payroll operations if it has fewer than 20 employees. Get out your calculator. Multiply the number of hours that employees are spending on payroll-related activities times their rate of pay. Compare that number with the prices proposed by service providers, and factor in added expenses such as printing checks and creating tax documents. The numbers might surprise you.


• Reliability: With payroll services, your people will get paid on time every time. It won't matter who's on vacation or out sick.


• Productivity: Relieving your employees of payroll management frees them to do more productive things related to your core business.


• Accuracy: Payroll mistakes happen, and they can cause problems and rile emotions up and down the line, from upset employees to governments hungry for their share. Payroll providers specialize in paying people, and they usually make fewer mistakes.


• Insight: In-house employees who do payroll as just one of their jobs likely do not keep abreast of regulations and tax laws. Payroll specialists do, and their insight can be invaluable.


• Speed: Payroll-service providers have the specialized hardware and software infrastructure to rapidly handle even the most complex payrolls.


• Flexibility: The in-house person or people that you free from payroll responsibilities will be free to do other work. It's as simple as that.


• Security: Payroll-service providers are experts at what they do. They've seen time and rate abuses and other types of payroll fraud perpetrated by unscrupulous employees, and they have the experience (and usually the technology) to spot them.


• Accountability: Hiring a service puts responsibility on its shoulders and relieves you of that burden. If something is wrong with payroll, it's the service provider's responsibility to fix it.

Outsourcing payroll services can benefit small companies in many ways. It's a matter of doing the math and seeing if the numbers work for your business.