No matter the size of your business or industry, payroll can be a complicated process that brings forth a variety of challenges. Early on, you must decide whether it is best to hire a payroll company or handle this task on your own
Before we go any further, it is important to note that managing payroll is far more complex than writing paychecks to employees. There are multiple responsibilities including:
- Issuing paychecks
- Complying with all federal, state and local laws and regulations
- Withholding employee taxes
- Issuing W-2's at the end of the year
- Notifying the proper authorities when an employee is hired or leaves the company
Now, let's take a closer look at the advantages associated with outsourcing payroll.
1. Accuracy. There is nothing more important than being accurate when it comes to your payroll and related financial aspects of your business. With the help of a professional company, you can be rest assured that your payroll is being managed in the most accurate and timely manner possible.
2. Remove yourself from the equation (for the most part). When you do your own payroll, you will have to spend several hours each month on this task. Do you really have time for this? Wouldn't you rather spend your time on tasks that are better suited to growing your business?
3. It is no longer your responsibility to stay current with federal, state and local laws and regulations. As you probably know, payroll laws are always changing. Just when you think you have things figured out, another change is put into effect.
4. Reduced costs. On the surface, it is easy to believe that doing payroll yourself is the cheapest option. However, this is not always the case. You are likely to spend more money doing it yourself due in large part to direct labor costs. On top of this, you are spending valuable time that could be put towards other areas of your business.
5. Helps you avoid penalties. Did you know that many businesses pay tax related penalties every year for incorrect or late filings? It is essential to pay the proper amount to the IRS, state and local authorities — on time, every time. Your payroll company helps make sure this happens.
These are just some of the many advantages of outsourcing payroll instead of doing it yourself.