A new year has begun, and it's not too late move to a payroll management company. But is it the right choice for your business?
If your company has been growing over the last few years it's likely that you're management team is feeling more pressure with the growth. In particular, you may be realizing that you could use more help with your payroll management.
There are a number of decisions to consider, however, such as whether it will be cost-effective, where to turn, or even how to get started. Such a move can be difficult and even frustrating because there are many options and making this type of decision with your payroll process is not light thing.
One of the problems with a business's payroll process is maintaining efficiency while staying in compliance. This is an increasingly difficult task for any business, and especially for smaller businesses that are growing. Yet, it is absolutely essential to keep this important facet of your business's finances under control while keeping the process cost-effective.
Another concern that owners and managers have when considering outsourcing is the impact of such a change. It will affect their operational structure and may require some significant restructuring. As a result, it may seem that implementing a new payroll management approach for your company will be a major task.
But it is a move that can be vital to the continued growth and health of your company. And the end result will be a payroll system that runs smoothly.
In general, the payroll management process refers to the administration of payroll tasks. Among other things, this usually includes recording the data for the hours worked by your employees and calculating staff paychecks.
In addition, there are a number of other aspects of payroll and compliance that have to managed, such as paid time off and sick leave, as well as the calculation of employee wages.
Increasingly busy payroll staff can be easily be overwhelmed by the volume of work involved and this can easily lead to some unfortunate situations like payroll errors.
For example, failing to properly pay employees can cause employees to become disgruntled over time, not to mention making it impossible to properly record the transactions in the books.
This not only creates employee and morale issues, but it ties up the finances of your business while your staff works to correct errors.
Payroll management involves time keeping, as well as the calculation, withholding and remittance and filing of payroll taxes. In addition, there is also the calculation of social security, federal unemployment, federal income and state income taxes, not to mention health care benefits and share-of-premium calculations.
And compliance required every step of the way.
These are just some of the valid reasons for seriously considering outsourcing your payroll functions. And probably the single, most obvious reason for outsourcing all these tasks is that they simply don't need to be done by your own staff! In fact, the time and resources gained by outsourcing will more than pay for the investment over time.
Benefits of Outsourcing your Payroll Management Process
Your business can benefit in a number of ways when you opt to outsource your payroll management process. For example:
- Managing payroll correctly from the start saves time by eliminating the need for managers to scramble to gather the information needed to calculate payroll.
- Calculating payroll seems like a simple task, but ensuring that all of your employees are paid on the appropriate date is not always as easy as it seems. Managing payroll keeps information accessible for the calculation and issuance of paychecks. Employees receive their pay on time when payroll is properly managed.
- Failure to properly withhold taxes from employees' paychecks can cause serious problems with the IRS. Hefty penalties may be assessed, so managing payroll to ensure that taxes are accurately calculated and withheld is a must.
- Employees expect to be paid for the benefits that they were promised when they were hired. Failure to accurately calculate these benefits can lead to underpaying employees. While this error can be corrected in subsequent paychecks, employees are counting on being properly paid when they earn their pay.
- Records may need to be accessed in the future to determine financial information. This may be used during audits or when an employee files a complaint related to their pay. Managing payroll ensures that these records are complete and easy to find as needed.
Outsourcing as Part of Your Overall Business Management Plan
Typically, entrepreneurs start up their businesses and, in the process, initially do most of the work themselves by taking on the responsibilities of marketing, sales, HR, technology, and other functions of the business. Over time these business owners bring on employees to do the work that the owner doesn't need to do.
As the business grows the owner and management team often sees functions that could be better done by a third-party firm as opposed to in-house. However, many smaller and medium-sized businesses continue to process their payrolls in-house even when outsourcing would be a better option.
This is especially true when they have invested significantly in payroll personnel and training. While this is typical, the fact is that many companies eventually find that it can have a negative impact on their overall performance and bottom line.
Ultimately, the decision to outsource is a strategic one.
Payroll management may be only one component of your strategic business management plan, but it is an essential component. This is primarily because the proper calculation of payroll and the timely issuance of paychecks has an impact on other parts of your business.
By outsourcing your payroll management you'll ensure that your financial records are accurate an you won't have to worry about going back to make changes because of a miscalculation in payroll. Even a small error can have a huge impact on your company's financial records, so outsourcing payroll management as a part of your overall business management plan is essential to the continued success of your business.
Your Best Payroll Outsourcing Option
In addition to the time and dollar savings, a great reason to consider outsourcing is having the peace of mind of knowing that your payroll processes are being handled competently, accurately, and on time.
On top of that, you can be assured that the accountability and liability for compliance rests with your vendor, freeing you from the constant pressure of staying fully informed and compliant with the ever changing - and growing - rules, regulations, and legislation.
As a business owner or payroll manager you have a number of options for your payroll functions. Software that can be installed in-house, or cloud-based programs offer a good alternative. But if you really want to take full advantage of the benefits available to you, outsourcing to a provider like Accuchex can still be the best decision.
Reliability, full-service options, and reputation are the hallmarks of a quality payroll management service provider. If you are currently looking to invest in outsourcing your payroll management, get your Free Download: Payroll Outsourcing Guide to help you make an informed decision or call Accuchex Payroll Management Services at 877-422-2824.