Payroll management can pose challenges for small businesses, and this is a well-known fact. In a recent survey conducted by Deloitte, it was revealed that 45% of small businesses opt for outsourcing payroll to avoid errors. But what exactly does outsourcing payroll entail? And how can it benefit your small business? Allow us to guide you through the process. By finding a reliable outsourcing solution, you can streamline payroll management and minimize the likelihood of errors occurring.
What is payroll outsourcing?
Outsourcing payroll involves hiring an external provider to manage your company’s payroll administration. Instead of relying on an in-house payroll or HR professional, team manager, or small business owner to handle payroll tasks, a third-party company handles all the logistics. The decision to outsource payroll is often made to save time and money and avoid potential payroll mistakes that could lead to dire consequences.
When should you consider outsourcing payroll?
Outsourcing certain aspects of your business can be a daunting decision. As a business owner, you naturally want to maintain control and be at the forefront of decision-making. However, for small businesses, getting caught up in the nitty-gritty details of payroll management can hinder your ability to make a more profitable decision.
Several indicators suggest it may be time to consider outsourcing your payroll solution. If your current system consistently results in errors, it can become a liability. This not only leads to increased costs but also wastes valuable time and hampers productivity. Moreover, struggling to comply with IRS or state labor laws can further complicate matters, causing frustration among employees who must endure long wait times for their paychecks.
Furthermore, a company can face tax penalties due to mishandled payroll administration. These penalties become financially burdensome on their own, but the situation worsens when you factor in the additional time and effort spent dealing with audits or penalties.
What do payroll companies do?
Payroll outsourcing services automate payroll tasks like tax calculations, paycheck deposits, and report generation. They offer a range of features for efficient payroll management, including phone and desktop applications, professional support, and HR outsourcing. Outsourcing eliminates the need for an in-house team, saving time, resources, and reducing errors.
Why should you outsource payroll?
Cost savings: Hiring an in-house payroll employee can be costly. Additionally, if you spend your own time managing payroll instead of focusing on other aspects of your business, it can result in financial losses. Outsourcing payroll provides a more affordable alternative.
Time savings: Instead of worrying about payroll tax documentation and processing, outsourcing allows you to allocate your time to more important tasks as a business leader. This ensures that you can focus on what matters most.
Accuracy: Payroll errors can cause numerous issues, including employee frustration and potential turnover. Outsourcing payroll reduces the likelihood of errors, especially for companies with a large workforce.
Tax penalty protection: Payroll errors will lead to tax penalties. By entrusting tax compliance to a professional payroll service, you can avoid this headache and gain peace of mind.
HR services: Some payroll processing platforms offer additional HR features, such as managing time off and insurance. These features can help streamline employee management and decrease costs for your business.
Direct deposit: Employees appreciate timely payments. With outsourced payroll, you can easily set up automatic direct deposit, ensuring that no one must wonder when they will receive their pay.
Onboarding new hires: Outsourcing payroll enables a smooth onboarding process for new employees, ensuring that they are added to the payroll and ready for their first day of work before the next pay period.
Outsourcing your payroll can empower your business and allow you to dedicate more time to the aspects of running your business that you genuinely enjoy. Discover the ideal service to streamline payroll for both your business and your valued employees.
Ready to outsource your payroll?
Contact us today at Profit Wise to get started! Call us at 256-489-1478 or schedule a consultation here.