Paying employees involves far more than just cutting a check on payday. For a business owner, managing payroll encompasses a variety of responsibilities that need to be met accurately and on time. Some of these responsibilities include:
• Withhold employee taxes.
• Pay withholdings to government agencies.
• File quarterly reports.
• Issue W-2 forms at the end of the tax year.
• Issue summary filings to the state.
• Manage your employees’ health plan and retirement contributions.
• Handle state disability, unemployment and family leave assessments.
Inform the government when you hire new employees and when employees leave your company.
If that sounds confusing or time-consuming, you may want to consider delegating the work to an outsourced payroll company. Outsourcing payroll allows you to be focused on growing your business and leave the payroll processing and tax filing to experts. If you are trying to decide if payroll outsourcing is right for you, consider the following benefits.
#1. It Saves Time
If you’re currently managing payroll in-house, you’re painfully familiar with the time and careful attention to every little detail it takes. And, as your company grows, the process becomes even more difficult. You won’t be bogged down with calculating payroll deductions and remitting checks to employees and taxation authorities. The printing costs of pay stubs may also be reduced by outsourcing. Some payroll companies offer a clock in/out function for employees, so you also save time calculating how many hours are owed each pay period. An outsourced payroll company also provides services such as direct deposit and online pay stubs to further ease the payroll burden.
#2. Calculate Taxes Accurately
If we had to guess, we would assume your small business does not specialize in understanding tax regulations and compliance. Payroll tax regulations can be complicated and confusing. It may be difficult to stay up with all the tax rules and changes when trying to run a business, yet you are legally responsible for inaccurate payroll reporting, which can result in penalties from the government. A payroll company often is better equipped to calculate these deductions accurately and consistently. The company also ensures taxes are paid on time. The IRS frequently penalizes business owners for errors in payroll-related taxes; one out of three is affected, according to “Inc.” magazine. The fines levied can cost more than the amount of the error.
#3. Reduce your overhead
In addition to reducing the probability of costly penalties, hiring a company to manage your payroll can save you money in other ways. Outsourcing payroll usually costs less than managing payroll internally. Particularly for small to medium businesses, the price to pay for training and the labor hours spent processing payroll in-house generally add up to more than the price of outsourcing. Your time is valuable, so saving time is money in the bank. If you compare the amount of time you were spending running payroll every week to the cost of a small business payroll service, you should actually realize cost savings.
#4. Quicker Processing and Easy Access for Employees
Payroll service providers employ experts in payroll rules and requirements. Because payroll is all they do and they have advanced technical resources as support, they can complete complex payrolls quickly and accurately. Outsourced payroll often comes with an employee access system that allows your workers to easily see their personal payroll information. The employee can simply login which creates a quicker and more efficient way to get information to employees and makes it easier for them to update their information. Since this feature often comes with outsourced payroll services, employers don’t have to worry about maintaining it.
While every payroll company is slightly different, the benefits of outsourcing payroll often outweigh the negatives. If any of these factors are leading to inefficiencies or limiting profitability in your company, it might be time to consider payroll outsourcing.
Limitless Investment and Capital’s Outsourced Payroll Services
Small business owners spend an average of eight hours a month performing payroll functions. That’s 12 full days a year that could be spent generating sales, prospecting new business opportunities, improving products or services, or servicing customers. Limitless Investment and Capital helps you stay compliant while significantly reducing in-house staffing needs and costs.
Our outsourced payroll professionals can manage your time-consuming payroll processing and payroll tax filing, so you can focus on value-added and revenue-generating activities. Reduce in-house staffing needs and time spent on tedious tasks. To learn more get in touch today!