Regardless of whether your company has only one employee or a few hundred, there are formal payroll procedures that need to be followed to do it properly. You can certainly perform these tasks yourself or you have the option of outsourcing those tasks to a professional payroll service.
It is important to remember, no matter what payroll process you use, as a business owner, you are still responsible for all things payroll related. You are still liable for paying taxes on time and paying your employees what they are owed.
Let’s look at a few reasons why outsourcing may be a better option.
Cost of time
Your company needs you focused on running your business, not to process the payroll. Doing it on your own takes away from locating new business, customers or creating business partnerships. Outsourcing payroll to a company that specializes in payroll, accounting, and taxes will free you up to run your businesses day to day operations.
Leave the complexity to the service provider
Your payroll service provider has someone dedicated to your business. They are also trained to know about the different types of taxes that must be collected and remitted. This includes local, state and federal tax, FICA for Medicare and Social Security as well as federal and state unemployment tax, to name a few.
Additionally, your payroll service provider will be aware of changes annually in tax laws, rates or submission deadlines, etc.
An idea of what can be outsourced
A good payroll processing service will be able to assist with some or all of the below items:
- Storage and repository of all payroll records and consents.
- Pay amounts used for withholding, including deductions to create paychecks
- Delivery of the paychecks (mostly direct deposit today)
- Calculation of annual wage and tax reports.
- Submission of payroll tax reports, including payments to the IRS and individual states.
- Reporting and paying unemployment taxes
- Sending payments out regarding other deductions; health and/or pension plans, wage garnishments or contract/non-employees.
Questions to ask of your Payroll Service Provider
- What can you provide regarding measures taken to keep data secure? Has there been a previous data breach?
- Is the system cloud-based or does it need to be located in our office? (cloud-based is more popular today)
- What can you provide to help me understand how you keep up with changes in tax laws?
- Walk me through your handling of customer service issues, please. (includes urgent requests, live support or via chat, etc.)
- If corrections need to be made, what are the deadlines that need to be met?
- How will I know payments are being made? What method of notification is used and can I follow-up online myself?
Why You Should Outsource Your Payroll
When it comes to payroll outsourcing, choosing a service provider that is both efficient and cost-effective is always the goal. In light of this, it is vital to do your homework in order to assess your business needs well in advance of making your decision. With the right provider, you will be able to manage the business toward growth more and thinking about weekly payroll much less. After all, focusing on growing your business is the best way to keep your business afloat.
