Four Smart Reasons to Outsource Payroll
Aug 29, 2013
You went into business to make a profit. Yet you find yourself cutting payroll checks, making tax deposits and filling out reports. But it doesn’t have to be that way. You may be surprised how affordable it can be to outsource payroll preparation. Take a look at four reasons why your company should turn the headaches over to professionals.
If your company is focused on generating higher profits, you may think it makes economic sense to do as much as possible in-house. But take a look at four smart reasons to outsource payroll:
1. Save time. Getting payroll calculated, processed, and distributed takes countless hours. Computer glitches, power outages, time off the job, and other unforeseen problems can make it take even longer. Your time and resources can be better used doing what you do best.
By leaving payroll to the experts, you can spend more time paying attention to your customers and clients. Payroll professionals are prepared for emergencies and can get checks out when you need them.
2. Reduce liability. Not only is calculating state, federal, and local payroll taxes time-consuming, if a mistake is made, you may be looking at penalties and interest on top of your regular tax burden. The IRS and state tax authorities take payroll taxes seriously.Handling payroll involves making accurate and timely payroll deposits, as well as filing numerous reports throughout the year. Missing a deadline or miscalculating amounts can be costly. The IRS estimates that 40 percent of businesses end up owing payroll tax penalties every year, at an average of around $845 per employer.
Payroll service providers are experts in their field and can calculate your company’s taxes and tax deposits accurately. It makes sense to leave payroll to the experts so you can pay more attention to your customers and clients.
3. Worry less about complexity. Mistakes can happen, no matter what the size of your company’s payroll. This is especially true when paychecks are just one of many tasks you’re trying to juggle. Yet, if you handle payroll in-house, you must stay on top of changes in tax laws, withholding, reporting, and overtime rules.
Payroll service professionals make it their business to know when the tax laws and rules change and how those changes affect your company.
4. Save money. If you think you can’t afford to outsource payroll, you may not be counting allthe costs of doing it in-house. How much is an hour of your time worth? How much time do you spend keeping up with payroll regulation changes, handling payroll, making periodic deposits and filing reports including W-2s and 1099s? In addition to the cost of your time, there are computer, printer and check stock costs.
Add up how much it realistically costs to handle payroll in-house. Then contact a firm experienced in payroll processing and ask for a quote. Chances are, you’ll be pleasantly surprised at how affordably you can outsource your payroll headaches.