- Payroll software
- In-house accounting team
- Payroll provider
In this article, we review the benefits and drawbacks of each payroll option so you can decide how to best handle your payroll responsibilities.
Payroll Software Simplifies Small Business Accounting
Even with a small team, tasks associated with payroll can eat up hours every week.
Payroll responsibilities might appear simple on the outside, but there are several tasks involved, including:
- Tracking time and attendance
- Calculating payments for employee checks, tax deductions, retirement funds, and insurance premiums
- Making payments to employees, the government, retirement funds, and insurance agencies
In addition to that, all records, deductions, and payments must achieve a perfect level of accuracy, or you risk falling short of your legal obligations.
Payroll software takes hours of work off your hands every week by managing all of the payments, filings, deposits, and reports associated with payroll.
Most payroll software only requires you to input employees’ hours and wage information.
For example, the suite of automated solutions for payroll software provides may include:
- Payroll processing and tax payments
- Manages direct deposits
- Provides a self-service interface for employee onboarding.
Payroll software can be an excellent solution for small businesses. You don’t need to be a computer whiz to run the software, but it helps to have a tech-familiar staff member who can get you set up and running smoothly with your new software.
Many payroll software services also provide phone support, which is a helpful resource when you’re getting started.
Despite all its advantages, payroll software still requires business owners to set up their systems and leaves them vulnerable to data-entry errors or mistakes that can result in an inaccurate balance sheet, disgruntled employees and contractors, or even government penalties and fines.
In-House Teams Allow Flexibility, But May Lack Experience
In-house accounting teams that manage payroll keep your private information “in the family” and often feel like the most comfortable option available.
In-house teams also are more flexible and amenable to immediate tasks and requests.
Unfortunately, in-house payroll teams can have a couple of serious drawbacks.
First, costs associated with in-house teams can be a poor investment. Each member of your team represents the cost of a full-time salary and benefits package, which can be pricey compared to payroll software or even outsourced accounting.
In addition, in-house employees can put your company at risk since you bear legal responsibility for any mistakes, poor choices, or fraud that may take place.
If your business needs human resources to manage its payroll needs, consider outsourcing your responsibilities to a payroll provider for a safer and more efficient process.
Hiring a payroll provider means you have a team experts that takes all the work off of your hands, including:
- Employee onboarding
- Reports, tracking, and employee payments
- Insurance, tax, and retirement payments
Full-service payroll experts can be expensive, but the investment may be worth it for many companies.
About 40% of small businesses incur an average of $845 a year in IRS penalties.
Full-service payroll experts significantly reduce your risk of penalties and work with you to resolve any issues.
Professional firms abide by all current laws and regulations while also taking accountability for the quality of their work. If they do make a mistake, they cover the cost of fines and penalties.
Although outsourcing your payroll can be costly, it puts your private information in safe hands and ensures that your system is in the hands of experts.
In turn, a professional service frees up time for your staff to focus solely on building your business can result in a higher ROI, turning the associated costs into one of the best decisions you make.
Payroll Services Can Save Valuable Time and Resources
Managing your payroll services in-house could mean your company is losing precious time and resources while also putting you at risk for potential fines and penalties.
Payroll software or dedicated payroll services help you save time and reduce risks involved in the complex tasks related to payroll processing.
Riley Panko is a Marketing Communications Manager for Clutch, a platform for B2B research, ratings, and reviews.Last modified on Tuesday, 26 May 2020