One of the most significant behind-the-scenes tasks for any small business is the completion of payroll – a task that consists of managing billing, issuing checks and direct deposits, reporting taxes to the government, and more. This task is also one of the most commonly outsourced for businesses due to the ways that it can help save time, reduce costs, and provide security.
A popular praise of outsourced payroll is that it saves time. Completing payroll is a tedious job that involves inputting data, checking and double checking for errors, generating reports, and preparing taxes and returns. By choosing to work with a payroll service, your staff is free to do other activities that generate revenue for the business or otherwise add value, such as making sales or pursuing new clients. And if you’re a boss trying to manage payroll on top of your regular tasks, using a payroll service allows you to spend more time with your family instead.
You may have considered hiring a bookkeeper to process your company’s payments. By using a payroll service, you do not need to pay wages to an extra staff member. In many cases, the cost of a payroll service is less than what it would cost your business to hire even one part-time bookkeeper to manage payroll.
Direct deposit payments are a valued convenience in the modern business world, but they can be difficult to manage across several employees. With a payroll service, you can offer direct deposit to your workers with ease. You also are not required to constantly update your own payroll software or worry about whether or not you are using the most recent tax information for your state.
A payroll service also frees you from worrying about the security of your company’s network and whether or not you need to spend time training a bookkeeper who could leave the company with no warning. The best payroll services spend time making consistent backups and investing in the latest technological systems for data protection.
Unfortunately, IRS penalties related to incorrect or late filings and payments are common among small businesses. Using a payroll service is a way to guarantee that you will not be hit with penalties due to the thorough care that goes into your company’s payroll system. If for some reason a penalty does surface, it is typically absorbed by the payroll service.
Although you are legally responsible for reporting to the government as a small business owner, the regulations are always changing. A payroll service stays on top of the changing tax tables and government forms, and takes care of all of it on your behalf.