Whether you started off as a smaller business and realized that your needs have grown or you’re just launching your new business, there are several advantages associated with handing payroll responsibilities off to a professional. In a recent survey, nearly three quarters of CPAs employed by small businesses felt that their clients did not possess the proper expertise to handle payroll processing. Furthermore, many of those same CPAs believed that their clients’ time would be more efficiently spent working on the countless other demands associated with running a business. Here are the five most important reasons why a small business owner can benefit from outsourcing payroll.
When you save time, you save money. As a business owner, consider the time you might spend completing any of the following tasks:
Creating reports for accounting or in-house use
Generating payroll every time period
Signing, printing, and distributing paychecks or paystubs
Remitting and preparing payroll taxes and returns to government agencies
When another provider accomplishes these tasks for you for every payroll period, you will likely save money in the long run by using your freed-up schedule to focus on managing the business and generating profits.
No matter how many individuals you employ, paying attention to payroll can still demand a lot of time and effort. This requires that a business owner sit down each pay period and calculate a lot of data, double-checking for errors before submitting the material. When you choose to outsource this function, you can free up time immediately. In contrast to spending countless hours on payroll, an employer would only have to make contact with customer service representatives once throughout each pay period.
Payroll processing is complex and could expose you to risks in the absence of a proper system for managing it. A payroll solution outsourced to a professional can provide assurance that the daily calculation of payroll is being conducted confidentially. By hiring a dependable outside firm, you can rest assured knowing that you’re working with a company that takes data protection seriously.
A professional payroll provider can alert you to potential problems before they happen and help you to streamline operations. Your payroll service provider may catch details that have slipped by your notice. This is just one of the many ways that their professional expertise can make your life easier.
Government Regulation Compliance
The majority of small business owners would not be considered experts in the complex arena of government tax regulations; however, they are regularly responsible and held accountable if there are misrepresentations or failures to accurately report employment taxes. Mistakes can lead to audits and penalties. In fact, the IRS estimates that as many as 40% of small businesses in the US pay penalties of more than $800 a year as a result of these mistakes. Having a payroll service provider handle this information for you reduces the chances that you’ll be paying such penalties.