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5 Reasons that Businesses are Outsourcing Payroll
June 5, 2017
More and more businesses are looking at ways to simplify and save money. Many business owners are finding that outsourcing payroll is smart business. Payroll is more complicated than just issuing a paycheck. There are various regulations and deductions that need to handled. In addition, you need to track holiday pay, sick pay, vacation pay, insurance deductions, pension, 401(k) contributions, and various other contributions. Although a payroll service is expense for any business, the peace of mind of having experts handling payroll can free up time for business owners to focus on building their business.
#1 Error Proof Your Payroll
An automated payroll service ensures that all withholdings, payroll taxes, insurance, 401(k), etc. are properly calculated and the employees are paid their correct amounts. Payroll regulations can vary based on where your company has employees or business. In addition, businesses must keep up with the most current information which can be challenging. They need to understand the ever-changing tax and remittance regulations. When using a payroll service, they will be able to provide you the most up-to-date information to serve your organization.
Payroll companies will not take responsibility for incorrect data that an employer provides, but will often find mistakes and be able to notice them on a submitted payroll. Approximately ⅓ of small businesses gets hit with a penalty each year for filing payroll taxes incorrectly. Even a small error can be costly. Payroll companies can make mistakes, but most payroll companies back their work with a guarantee.
#2 Cost of Payroll Service vs. Employee Hours Spent
Most businesses, especially small businesses with under 20 employees, can save money by outsourcing payroll. When business owners add up the time internal employees spend on payroll including the cost of printing and distributing checks, creating tax documents, and bookkeeping; they find that payroll services will be able to offer the service for less. Payroll services operate at volume, use sophisticated payroll software, and employ best practices which save money.
#3 Time Saver
One of the most important reasons why small business owners choose to use a payroll service is to save time. The time it takes for a business owner to accomplish the task of completing payroll and writing checks or depositing funds to an employee reduces the time he or she can invest in areas that can help grow their business.
Many business owners can attest that there are multiple tasks that divert attention away from areas that can drive their business. The internal staff of a company that usually does the payroll likely has many other high-value tasks that they can focus on if payroll is outsourced.
#4 Legal Compliance
A payroll service has both, the expertise and resources, to complete payroll paperwork accurately. Payroll services are keep pace with complicated, changing legislation and tax obligations associated with payroll in order to maintain legal compliance. Businesses can count on a professional payroll service to meet filing deadlines and make timely and accurate deposits. Payroll services can be particularly helpful for companies with a dispersed workforce, since payroll laws tend to vary from state to state.
#5 Selection of Payroll Services
Although Error Proof, Cost, Time and Legal Compliance are important, selecting the right payroll service is important. If you take the time to research payroll companies, there are many options out there to suit your particular business needs. Make sure that when you select a payroll company that they will be able to handle specific requirements that may be unique to your company. Payroll companies cater to different size businesses and can offer select services that suit your company’s needs if you take the time to find the right one~