Even the most meticulous, qualified, and experienced business owners all agree that payroll can be a pain in the neck. Of course, it’s essential to your business, but calculation errors, hundreds of tax codes, endless regulations and costly mistakes create another Friday afternoon headache business owners don’t need.
A recent survey showed nearly 75 percent of CPAs who serve small businesses felt that their clients do not have the necessary expertise to handle the demands of payroll processing. And 68 percent suggested their clients’ time would be better spent working on the many other demands of their businesses.
Some of the most successful businesses understand one key concept: outsourcing. Outsourcing payroll allows you the most efficient means to take care of your employees and focusing on your business. There are countless benefits of outsourcing payroll, but we’ve focused on the six areas our clients enjoy the most.
Focus on what you’re good at.
If you run a bakery, focus on perfecting your recipes, not working through tax code. Whether you have a landscaping business, a roofing company, a book shop or a clothing company, that’s where your focus should be. Being a business owner is hard enough without figuring out the intricacies involved in running payroll. Perhaps the biggest advantage of outsourcing payroll is the ability to stop deciphering IRS regulations and get back to the fun part of business. Now you can devote that free time to refining sales and marketing strategies, improving your product, and developing new leads.
Avoid costly mistakes.
It might seem simple, until tax season comes along. Then you realize that you checked the wrong box and you now owe the IRS $25,000. In 2013, the Internal Revenue Service issued 6.8 million penalties, totaling $4.5 billion related to employment taxes alone. Payroll is a critical function and includes a range of federal, state, and local laws. In fact, there are almost 10,000 taxing jurisdictions across the country. Every year, hundreds of new laws are enacted. There are legal requirements, tax reporting and remittance, electronic filings, and a basic knowledge of the constantly-changing wage, hour, contractor and overtime rules. Even if you can avoid costly mistakes, there is never a good time for business owners to spend countless hours working through new hire paperwork, employee disputes, or federal paperwork requirements.
Settle security concerns.
There’s quite a bit of risk that comes with in-house payroll. Employee records are available and open for almost anyone to view. Inaccuracies or misuse of employee information might not seem like a big deal, but it doesn’t take much for misuse to turn into identity theft, or inaccuracy to shift to embezzlement.
There’s also risks associated with the security of your payroll software. If you house your data on a server or network in hours, it can leave you vulnerable. Outsourcing payroll gives you access to highly-secure servers with cutting-edge encryption technology and redundant data backups.
Keep up with technology.
Let’s be honest, if you hand anyone under the age of 25 a paper check, there’s a good chance they won’t even know what to do with it. Employees expect technology that matches the world they live in. That means direct deposit, self-service access to payroll information line and maybe even an app that allows them to track their hours and earnings. For some small business owners, this is another headache for others, it’s just one of the benefits of outsourcing your payroll.
Integration with all other employee information.
Employees need a lot more than just a paycheck every two weeks. There are employee requirements, training, W-2 filings, classification of employees and contractors, overtime, and garnishment requirements, just to name a few. One of the advantages of outsourcing payroll is a one-stop-shop for taking care of your employees. Now, their hours, overtime, classification and tax information can all be arranged, organized, and taken care of in one simple system.
Reduce overhead costs
Any successful business owner understands that everything has a dollar value. The dollar value of any given tasks must be linked to a revenue source. Time is one of the biggest spenders in the world of small business. The time you’re able to save every day equals more money earned. Stop wasting money calculating hours, deductions, paid time off, sick leave, and taxes. Eliminate the need to print, sign and distribute paychecks, process direct deposit or generate reports. You’ll find a lot of cost savings when you take those tasks off your plate.
Enjoy peace of mind.
Perhaps the biggest benefits to outsourcing payroll is the peace of mind that you can enjoy. Payroll firms know and understand tax law, they take care of both the liability and the responsibility and make your business their priority. By delegating payroll to a reputable source, you allow yourself more space to sit back and relax.
If you’re looking for reliable and professional payroll services for your small business, look no further. Magellan Human Capital Management was voted one of the Top 10 Payroll Solution Providers in 2017 by HR Tech Outlook.
Give Magellan HCM a call today and it’s all taken care of.