Small business owners recently shared their experiences about payroll processing and compliance. There were certain common threads whether the business owner operated an HVAC service company, a restaurant, retail business, or professional services.
“I’m a one-man band. Making sure I know what compliance issues are on the horizon is a major challenge.”
“It takes a lot of time to find errors in manually entered data.”
“I seem to spend a lot of time researching new laws or tax increases, which can be frustrating since they change frequently.”
Let’s face it, you got into business because you’re passionate about law or dentistry or making the best Chicago style pizza in a thousand miles in any direction. Running payroll and managing your employees’ deductions probably isn’t the most important thing on your ever-expanding to-do list.
According to our recent HR Trends Survey Report, the top five payroll processing challenges facing small businesses are:
- Keeping up with federal, state and local compliance recordkeeping (59%)
- Manual data processing (55%)
- Payroll tax compliance (51%)
- Data security and payroll fraud prevention (35%)
- Paying independent contractors and gig workers (30%)
Wouldn’t it be easier and less stress inducing if you didn’t have to worry about keeping up with regulations and compliance and data security and making sure taxes were filed correctly?
Let’s talk about automation
Simpay’s payroll solution automates the payroll process so you avoid the manual data entry that so often results in errors. Thos errors can turn into very costly mistakes too. If the IRS discovers mistakes on your tax return due to a simple error or negligence or if there is a substantial understatement of the taxes owed, your business will face a 20% penalty. Not filing your business and employee taxes on time will result in a 15% penalty.
Most payroll errors happen because small business owners are busy managing their business, attracting more clients, competing with online giants, and navigating the changing landscape of running their business in today’s marketplace. If you wanted to be a payroll and compliance expert, you probably wouldn’t be the owner of an auto repair shop or florist, right?
Staying on top of tax compliance
Even though the compliance regulations change frequently, it’s your responsibility as a business owner to stay compliant, which could be a full time job by itself. That’s where our payroll solutions comes into play. Our payroll program maintains federal, state, and local tax rates, tax brackets, and makes sure our system is constantly updated. What happens if you’re not compliant or make a mistake? You guessed it, the IRS will assess fines and penalties. In fact, payroll taxes withheld by employers account for nearly 72% of all revenue collected by the IRS.
Data security is critical
Think of all the personal data you have on every employee. You have their social security number, driver’s license, banking information, and home address, plus their salary information too. What’s your cyber-security like? What are your privacy protocols?
Simpay’s payroll program features strict information security controls and regularly performs management scans and encrypts data. Simpay’s program is also compliant with the Health Insurance Portability and Accountability Act (HIPAA) and the General Data Protection Regulation (GDPR).
Hybrid workplaces, 1099 contractors, and the gig economy
The workplace today looks very different from just a few years ago. It’s likely you have remote employees or contractors who turn in invoices on a monthly basis. You might be outsourcing certain aspects of your operation like marketing, website management, or advertising on a temporary basis and paying folks per gig. How do you classify these workers? Are they employees or not?
Employee misclassification is on the rise and you may be held responsible for paying back-taxes and interest on state and federal payroll taxes, if a worker is classified incorrectly. And of course, penalties can be imposed for failing to make timely payroll tax deposits.
Simpay’s Payroll & HR program is here to help your business stay compliant, file taxes on time, pay your employees and contractors and take a little stress out of your day.