In today’s tough economic climate, more people are deciding to pursue their dreams by starting their own businesses. This entrepreneurial dream comes with promises of freedom and fulfillment, but as many people come to learn, being the boss also means taking full responsibility of the back office, too. Since many small business owners are unfamiliar with administrative tasks, they often sacrifice some of their hard-earned freedom to handle them.
Outsourcing some of these non-revenue- driving functions can allow you to focus your time and energy where it matters most—on the business. Payroll, for example, is a time-intensive, multistep process that requires up-to-date knowledge of current labor laws, tax regulations and individual employee deductions. If an error is made, the best-case scenario is an employee’s pay will need to be adjusted slightly from one pay period to the next; the worst-case scenario could mean serious tax penalties owed by the business owner.
Outsourcing payroll can provide an extra set of hands, while allowing you to remain in control of your business operations. Here are some ways outsourcing payroll can benefit your business and lessen your never-ending list of responsibilities.
Online access anywhere, anytime
Though most payroll providers offer various options for submitting payroll data, many business owners are choosing to set up and manage their payroll online. After all company and employee data (social security number, salary, address, direct depositinformation, etc.) has been entered, you simply log onto your account from any web browser—meaning you can process payroll from your office, home or anywhere with online access.
Once online, you’ll be guided through a process that allows you to enter hours worked for employees and any special notes, such as vacation time or bonus pay. Employers also have the option of giving staff an online center for viewing and managing their personnel information. Employee self service websites have become a common tool for employees to view their check stubs, W-2s, year-todate tax earnings and deductions, as well as time-off balances and benefit selections. If the employee decides to make any changes to their information, it’s automatically updated in the payroll system. What’s more, if an employee has a question, all of the information is readily accessible online.
Hassle-free tax deductions
Calculating tax deductions according to federal, state and local municipalities is daunting enough, but the task is even more challenging when you consider that tax laws are constantly evolving. For example, in 2013, the federal Medicare tax will increase for individuals and families reporting income of more than $250,000 per year. And New York state residents are still awaiting an appeal verdict on the Metropolitan Transportation Authority tax that will be refunded to employers if it’s upheld as unconstitutional.
When outsourcing payroll, you don’t need to worry about keeping it up-to-date. Your payroll provider will keep you in compliance and most will guarantee taxes are paid accurately and on time.
Furthermore, if you’d prefer to handle payroll tax payment and filing yourself, many outsourcing providers like Accu Data Payroll offer a tax alert service to let you know which taxes are due and when to pay them.
Employee benefit integration
Another important aspect of payroll is deducting employee contributions, such as healthcare plans and 401(k) pretax retirement savings. When outsourcing, no calculations need to be done—instead, contributions are automatically deducted from payroll each time a check is issued.
With all your payroll data secure and stored in one place, reports can be easily configured and exported to help you analyze your business operations over time. For example, you can determine when overtime was most needed to help in staffing decisions, or if employees are using their vacation time each year.
Most payroll providers also offer easy integration with accounting, so you no longer need to produce any documentation. Instead, it’s all online and ready to view, which means you save valuable time that used to be spent printing and gathering pay stubs and tax forms.
Overall, outsourcing payroll can not only save time and resources but can also help provide peace of mind knowing that everything will be handled accurately and on time. Your workforce will have better resources at its disposal, as well.
If you’re feeling overburdened with administrative tasks, speak to your accountant for references and explore your options. You may be surprised at how much more you can accomplish when you outsource administrative tasks like payroll.