Card Processing & Fees Clearly Explained
Unless you’re a bookkeeper or accountant, you didn’t start a business to run payroll. And in the beginning, it probably wasn’t a big deal to do. Likely, you spent a few hours weekly or every other week, and a little extra time once or twice a year to understand any changes to regulations.
As your company grows, however, tasks like payroll take on a life of their own. You have more employees to track, more payroll records to keep straight, more complexity to benefits and compliance, more laws to worry about . . . and more opportunities to make costly mistakes.
Getting rid of these headaches is reason enough for many business owners to outsource their payroll management. But if you’re not sure whether payroll outsourcing is right for your business, we have some answers that will interest you by examining the pros and cons.
The advantages to outsourcing payroll are as unique as your business. Some reasons, however, are universal across all business sizes.
As you add employees, payroll takes more and more of your time. Time you could invest running and growing your business.
Managing W2s, employee tax paperwork, computing and collecting taxes at the local, state, and federal level, accurately keeping track of time off and sick time – all of these are payroll elements that divert time away from running your business. There is also a cost per employee.
Plus, accounting isn’t your area of expertise; your core business is. Time spent on payroll is time away from the areas of your business that need your attention, such as strategy and management.
As your business has grown, either you are spending more time wrestling with payroll, or another valued member of your staff is. There is an opportunity cost to having a business owner or important team member spend time on the tasks that can be easily completed by experts.
There are also other business costs you can eliminate if you outsource your payroll functions. When payroll is done in-house, not only do you have the labor costs of the person completing the tasks, you must also have the proper tools to accomplish the task. For instance, you need the right software and you need to keep it updated. You may also need to subscribe to tax and payroll news alerts so you stay current on law and regulatory changes.
Have you reached the tipping point? Does outsourcing payroll now make sense for you? Here are a few signs that it’s time to consider a payroll service.
That depends on what your goals are in terms of how much you want to keep doing and how much you want to hand off. There are a number of options:
Payroll management companies: Hiring a payroll company is pretty much the cleanest choice you can make. They will do all things payroll-related for you. From cutting checks, to changing deductions and tracking time off, to processing your payroll tax filings with the government.
Online software services: This option works if you’d like to keep running the payroll function in-house but you want better tools to make it happen. A “cloud provider” of payroll software gives you access to their solution, and this may help you auto-populate certain forms, but you still do all the payroll work.
Professional Employer Organization (PEO): A PEO leaves the day-to-day management of staff, hiring, and firing in the hands of the business, but handles nearly everything else, from payroll to benefits management.
Accountants: If you use an accountant for your business finances, you might also have them manage your payroll. But not all accountants are payroll savvy, and some would prefer to stick with general financial issues and not take on payroll. Payroll really is its own “world,” so to speak.
Also, don’t forget to leverage your business network. Other business owners are a great source for recommendations for professional services, and payroll outsourcing is no exception.
Choosing the right service to outsource payroll to is as important as any other business decision you make.
Do you have a consistent number of employees and low turnover? Do you have a mix of hourly and salaried employees? Part-time and full-time workers? Is your business dependent on seasonal employees? Do you need to pay local or city taxes? Do you need to process tip income? Does your current payroll frequency make business sense, or should you change it?
Creating a list of your needs will help you supply the right information to a potential vendor for a proper proposal to do your payroll.
When you’ve got a list of potential providers, delve into the services and benefits they offer. Ask questions like:
Reputable payroll processing services will understand your concerns and provide you with all the appropriate information you need to make an informed decision.
Your business needs you, but it doesn’t need you to be hands-on with every aspect. Payroll is critically important to a well-run business and employee morale, but it can be compartmentalized and outsourced. Knowing what you need from a payroll service before you begin your search will ensure you get the services you need at a price that saves the company money, saves you time, and allows you to focus on your bigger business goals.
If your payroll is becoming more time-consuming and distracting you
from running your business, give us a call.
Simpay takes the complete payroll process off your desk and makes it our responsibility.
Call Andrew at 866-253-2227 and press 1 to learn how.
A sample of what you'll learn each month: