The decision between outsourcing payroll and doing payroll in-house is one that small businesses face every day. As you might expect, we are big fans of payroll services – not just because payroll is our business, but because of the savings payroll services provide for small business owners.
First, payroll services save you time. As the owner of a small business, your goal is for both you and your new employee to dedicate as much time as possible to your service or product. But that's not going to happen if you process your own payroll. Many small business owners underestimate the amount of time it takes to do payroll for their company, regardless of the number of employees.
Inc. magazine recently identified payroll as the #1 task small business shouldn't micromanage. Their advice? "Outsourcing payroll is cheap and easy....Don't bother with this time consuming task."
Processing payroll, cutting paychecks, calculating withholdings, preparing W-2s and 1099s at year-end all demand valuable time — especially if you are not familiar with payroll regulations. The time you can save by hiring a payroll service will be much better spent meeting the needs of your clients.
A payroll service not only saves time for businesses but also saves money. Of course, there is a cost associated with outsourcing payroll. But how much is your time worth? How much is your employee's time worth?
It's a cliché, but it's true: Time is money. If you were to calculate the cost of doing your own payroll and compare it to the cost of outsourcing your payroll, you'd find that there is a significant cost advantage to outsourcing. Payroll services have the systems and expertise to be more efficient at handling your payroll needs.
A payroll service could also save money for your business by ensuring you don't incur costly penalties and interest charges. Payroll taxes can be complicated. If they are filed or paid incorrectly, your business will be subject to penalties from federal, state and/or local governments, as well any interest charges you rack up for late payment. On average one in three small businesses in America incur a tax penalty of $800 or more every year. Using a payroll service can save you from those penalties and interest charges.
Perhaps most importantly a payroll service can provide you with peace of mind. Secure online technology has made payroll services the easiest and least expensive way to manage your payroll needs. Additionally, those that file and pay your taxes and guarantee labor law compliance remove some very important — and very tedious — items off your plate.
Focus on your business and shop around for an established payroll provider that meets the needs of you, your employees and your business.