Payroll is a time-intensive task which holds a high level of importance to employee satisfaction and retention – if your business wants to retain top talent, payroll must be consistently accurate and timely.
Outsourcing your company’s payroll function serves many benefits, the main benefits are as follows:
Leverage Outside Payroll Expertise
Employees are exposed to over 10,000 federal, state and local tax jurisdictions across the United States. As companies grow, employers have many more employee records to retain and reporting requirement become voluminous. Most business owners and controllers don’t have time to keep up with constantly changing regulations, withholding rates, and government forms. By outsourcing payroll, a small business can take advantage of expertise that was previously available only to big companies.
When managing payroll there is always a risk of identity theft, embezzlement of funds, or tampering with company records for personal gain. Payroll service providers should follow best practices for backing and storing records and provide a sophisticated system for storing and protecting data.
Working with an experienced payroll provider can greatly reduce a company’s overall payroll costs. Research indicates that a small business with 10 employees will typically spend $2,600 per year in direct labor costs associated with payroll. On average, businesses overpay employees by 4% due to discrepancies in time reporting between the employee’s time sheet and the actual time worked.
Analyze the amount of time employees in your company devote to working on payroll as well as the costs associated with printing checks, distributing checks, creating tax documents, etc. If the costs of maintain your payroll function exceed about $100 per month it will be beneficial to outsource your payrol Avoid IRS Penalties
Many small businesses pay an average penalty of $845 per year for late or incorrect filings and payments. Most reputable payroll services offer a guarantee, ensuring that customers will not be responsible for costs associated with any penalties. This cost-saving can immediately justify outsourcing payroll’s function from a cost perspective.
Focus on Your Business
Payroll processing is an important but time-consuming process. Outsourcing payroll can free up staff time to pursue more important value-added and revenue-generating activities. Payroll is not an activity that will increase your sales or leads but it is essential to maintaining a strong and scalable business. Small businesses outsource their payroll function to become more competitive by focusing the time they save on value-add, client-generating activities.
Choosing a provider
Payroll providers should offer comprehensive first-rate payroll services to your company while maintaining a high level of customer service. It will be common to communicate with your payroll provider so they should be receptive and client-focused. Many financial business advisors offer payroll services in addition to their advisory services to fulfill all their client’s financial needs. This can be a great option, it is beneficial to have a trusted financial advisor involved with as much of your business and finances as possible.
Considerations of business needs to outsource payroll services depend on many factors, and business owners should analyze all the data before deciding to hire a professional or do your own in-house payroll management. Always exercise caution before hiring a payroll company. They will be handling a very important part of your business – a high level of expertise and customer service is important. Choosing an expert to manage your payroll offers many benefits, they provide a cost-effective, simpler means of paying your employees, filing your taxes, and performing many additional duties.
By consulting your business adviser now and considering the points above, you’ll be able to lower your taxes, reduce potential payroll-related penalties, and develop a strategic business plan to optimize your success in the upcoming year. If you need accounting and payroll services in Charlotte for help outsourcing your company’s payroll, give Camuso CPA a call today.