When Should You Use a Payroll Service?
Almost 80 percent of business owners say they find it difficult to stay on top of payroll. Many wish they could outsource the payroll services, especially since it can eat up so much time.
Despite that, many business owners opt to keep their payroll in-house. They may believe it’s cheaper than outsourcing. They might worry that another team won’t take as much care.
There’s a point when it makes sense to hire a payroll service, though. When is that point?
Take a look at this guide to when you should use a payroll service. If you find yourself noticing any of these scenarios, it might be time to get in touch with a payroll provider.
You’ve Made Some Payroll Mistakes
One reason to switch to a payroll provider is mistakes with payroll.
At first, mistakes in your payroll processing may not seem like much of a concern. They can lead to a lot of hidden costs for your business, though.
Employees who see mistakes on their paychecks are less likely to be satisfied with their jobs. In turn, they may have lower productivity. They may even decide to leave the business.
Turnover costs add up fast, so you want to do everything you can to reduce these risks.
Correcting payroll also takes time and money. On top of that, employees may threaten legal action if mistakes happen too often.
Working with a trusted payroll provider could help you avoid costly mistakes. Your employees will be paid correctly and on time.
You’ve Paid Penalties on Payroll Taxes
Sometimes, payroll mistakes lead to problems with your payroll taxes. Withholding calculations can be tricky. It’s tough to keep on top of deadlines for remitting taxes to the government.
If you get your payroll taxes wrong, though, you could be looking at some hefty penalties. Even failing to file paperwork or send the money on time can result in penalties.
Working with a payroll provider can help you avoid these outcomes. When you team up with the right partner, they’ll help you keep track of all your payroll responsibilities.
That means they’ll keep track of deadlines for state and federal remittances. They’ll also ensure that withholdings are calculated using the right rates. Finally, they can make sure that your remittances make it to the right accounts on time.
In that way, you’ll avoid costly mistakes and penalties.
You Have Concerns About Payroll Data Security
Another good reason to outsource payroll is for improved data security.
You know that you need to keep some sensitive data on hand to effectively conduct payroll, you need your employees’ Social Security numbers and you also have their legal names, addresses, and more.
What would happen if someone hacked into your system and gained access to that data? More than 40 percent of all cyberattacks are aimed at small businesses, so no one is immune to them.
As a small business owner, you may not have the budget to invest in top-of-the-line security. As a result, your payroll data and the rest of your systems could be at risk.
Your payroll service provider has the means to invest in those security solutions. They need to keep payroll data safe for many clients, so they want to make sure they offer the best in security.
Working with a payroll service provider could be the best way to get access to the security solutions you need.
A Payroll Service Would Cost Less (and Save Time)
Many business owners hesitate to send their payroll to a provider. They think it will cost them too much. Often, keeping payroll in-house is actually more expensive.
Business owners sometimes forget to factor in the cost of labor and other payroll fees. If you don’t look at those numbers, then doing payroll in-house may indeed look cheaper.
If your team spends five hours on payroll per pay period, then you’re paying them for each of those hours. You’ll also need to factor in the cost of payroll software, any payroll penalties, and fixing any errors.
The costs of sending out electronic pay stubs or printing and mailing checks also have to be added in.
You may think you’re saving money if you handle payroll yourself. It could actually end up costing your business much more. If you’re not familiar with payroll, then it may take you longer to complete. You may also make more mistakes.
There’s also an opportunity cost. Chances are that you’re much more familiar with other tasks in your business. You may be much better at sales or maybe you’re a product engineer.
By working on payroll instead, you’re also losing out on the work you could do if you let someone else handle payroll. How many deals could you close or clients could you follow up with in five hours or more?
When you look at the big picture and factor in all the costs, it may actually be more affordable to hire the experts to do your payroll.
You Need Help With More Than Payroll
Finally, you may want to consider working with a provider who does more than payroll. You might need help with payroll, but maybe you also need consulting about compliance or other HR tasks.
In this situation, it makes perfect sense to outsource. Your people are the backbone of your business, so having the right HR policies in place will help you keep your team on board. In turn, having the right HR team on your side will help you find and keep the talent you need.
Discover What the Right Payroll Service Could Do for You
Most business owners think of hiring a payroll service as an unnecessary expense. As you can see here, though, it may just be an economical and smart move for your business.
If you’ve found yourself in any of these situations, then it’s high time to get in touch with a team that offers exceptional payroll services and more. With the right team on your side, you’ll be ready to grow your business the right way.
Next Generation Payroll is a local black-owned business in Dallas. We provide services that are designed to create a level playing field that allows local businesses to thrive in a global economy. In other words, our services are centered around risk management, operational efficiency, and strategies that improve market penetration by improving business opportunity leads. We build up small businesses making sure your business is solvent, it operates efficiently, in all economic climates.
At Next Generation Payroll, we are not interested in fulfilling quotas and meeting monthly sales goals. We focus on goals that are centered around fulfilling our client’s aspirations. Our top priority is to simply provide a strategy to help your business reach full potential.
