Is monthly payroll wearing you out?
Numerous businesses spend too much effort and time writing payroll checks and trying to keep track of the requirements associated with bank deposits, withholdings, and possible penalties.
Paying employees in a timely and precise manner is critical. However, as you focus on developing your business, you may find it hard to stay on top of payroll processing-let alone staying abreast of changing IRS rules that affect how you file and deposit payroll taxes.
According to a recent study, 23% of small business owners spend 6+ hours per month on payroll. That is time you could spend generating sales, prospecting new opportunities, improving services, or servicing customers.
Furthermore, payroll processing can be frustrating for numerous business owners because it is time- consuming and raises the likelihood of errors. Consequently, you should consider outsourcing this task for these reasons.
1. Productivity/Time Savings
Payroll processing is time-consuming and keeping track of terminations and new hires, benefit deductions as well as changes in state and federal regulations can be frustrating.
Furthermore, business owners spend considerable labor hours preparing W2s and ensuring timely distribution every year.
Outsourcing allows you to focus on your core business and frees up the accounting or human resources personnel for more strategic tasks that could eventually influence your bottom line. Regardless of the number of employees, payroll demands considerable time and great attention to detail.
Therefore, you shouldn’t allow this task to take you away from management or productivity.
2. Avoid Errors/IRS Penalties
Payroll mistakes can be costly, angering workers and more ominously, the government. The IRS enforces a stiff annual penalty for incorrect or late payments and fillings.
Small business proprietors are not professionals in the challenging world of tax regulations. Simultaneously, they are lawfully responsible for any misrepresentation or the failure to report employment taxes to state and government agencies accurately.
Mistakes result in penalties and audits-situations no business wants or needs. Government regulations and rules are constantly changing, and it’s unlikely that you’ll stay abreast of the changes.
On the other hand, proficient payroll providers must keep up with current regulations, rules, and tax rate changes. A good service provider is less likely to commit serious errors than your in-house personnel are.
Numerous outsourced providers manage fillings, payments, and compute payroll taxes. Furthermore, they will assume the penalty cost due to erroneous calculations or late payments provided you offer the necessary information and timely funds.
Staying abreast of local, federal, and industry-specific changes can be challenging. Nevertheless, a reputable payroll provider has personnel committed to keeping up with the changes that could influence your payroll, ensuring compliance.
3. Capacity to Track Cost
If you outsource payroll, you’ll know the precise amount it will cost you; this is rarely the case when you manage payroll services internally. The ability to monitor your costs enables improved business management.
Service providers can process complex payrolls fast because they are specialists with vast resources. Unlike most business owners, they can accommodate a short-term influx of seasonal employees without purchasing new systems that will remain inactive throughout the year.
5. Team of Professionals
Most business proprietors and staff lack the time to study and constantly research changing regulations and government forms. By outsourcing, you can capitalize on the expertise that was mostly accessible to large companies.
Reputable payroll companies have professionals who handle numerous areas of payroll and human resources. Ensure you engage an experienced team of specialists who can administer all facets of your HR and payroll needs.
6. Enhanced Security
Payroll processing is a multifaceted and potentially risky task. Even with trusted staff, the possibility of identity theft and misappropriation of funds exists. Furthermore, you place your business at risk when implementing in-house payroll software.
As a business owner, you can’t be certain about the security and safety of the payroll data on your company’s network or server. However, most service providers have technologies that can identify and alert clients to different kinds of payroll fraud.
Moreover, online solutions provide a haven for confidential data. A reliable provider also invests in premium systems for protecting and storing data.
In conclusion, every business, small or large, should fulfill its payroll obligations to its workers. However, payroll issues are complex for the modern business. For this reason, outsourcing is necessary and offers wide-ranging advantages that translate to savings in terms of time, money, and effort.