Managing your business’ payroll can be challenging, for this reason, countless business owners consider hiring a payroll service company. If you decide to process your own payroll, you will need a computer, payroll software and a substantial amount of knowledge related to current payroll processes. Your staff members need to be trained and in-house payroll requires staying abreast of changes in your employees’ salaries, newly hired personnel and tax requirements. A payroll service company handles all of these issues, and more.
Top 5 Benefits of Outsourcing Your Payroll
- Avoid headaches related to payroll
Rhonda Abrams is recognized as one of the nation’s foremost experts on entrepreneurship, small business and business planning. She is an author, entrepreneur, speaker and USA Today Columnist. Abrams authored the bestselling business plan guide, “Successful Business Plan: Secrets & Strategies. In an interview with Inc., she states that businesses dealing with their own payrolls need to outsource. According to Abrams, even a business that only has one employee should hire a payroll service: She states that if you mess up on payroll, you have an enormous headache to contend with.
- Payroll service companies can eliminate costly mistakes
Small business owners who lack a significant amount of knowledge related to the payroll process can easily make costly mistakes: Mistakes that could lead to tax penalties. According to the Internal Revenue Service (IRS), from Oct. 1, 2012 through Sept. 30, 2013 the IRS filed nearly 7 million penalties for businesses throughout the nation; furthermore, these penalties total $4.5 billion.
- A payroll service company can save you time
Hiring a company to handle your payroll gives you and your staff additional time to concentrate on other areas of your organization, such as creating interesting ad campaigns that target potential clients, providing excellent customer service to your current clients or releasing an innovative product line.
A payroll service company saves you the time you spend:
- Processing your payroll.
- Filling out the checks.
- Delivering the checks.
- Determining and paying your employment taxes.
- Preparing and delivering the appropriate tax forms.
- Handling employee questions related to payroll.
- No concerns related to changing tax rules or paying penalties
Small business owners frequently worry that their payroll software is out of date. If you file your payroll taxes using out of date tax tables, the Internal Revenue Service could penalize you: These penalties are costly, as well as time consuming. Eliminate the frustration of re-examining the payroll tax code each year by outsourcing your payroll. When you outsource, your payroll service company is responsible for ensuring that everything runs smoothly and no penalties are accrued; moreover, the majority of payroll services companies offer their clients a guarantee that, should tax penalties accrue, the client will not be required to pay tax penalties.
- Payroll companies generally offer their clients additional services
A payroll service company may also offer services that make running your business even simpler.
These additional services usually include:
- Issuing W-2 forms to staff members.
- Direct deposit – companies that do not hire an outside payroll service company often have difficulty providing staff members with this option. With direct deposit, your employees can avoid heading to the bank every payday; in addition, the concerns of dealing with the time-consuming aspect of paper handling or spending time correcting the errors often associated with this form of payment are eliminated.
- Automatic check signing.
The time you spend and the resources necessary to effectively manage your payroll in-house makes outsourcing your payroll a viable alternative. Use this additional time and money to improve other aspects of your business.