The first week in September is National Payroll Appreciation Week, which celebrates the thousands of professionals who work hard every month to ensure millions of workers receive their paychecks on time. Across the country, employees and managers should take this week to show their appreciation for the men and women who deposit, collect and report trillions of dollars within the payroll withholding system throughout each fiscal year.
There’s no doubt that payroll is one of the most important things your company does – it supports your employees and keeps the business moving forward. As a manager or small business owner, you may have tried to handle payroll functions on your own when your company was first getting off the ground. However, as business expands, you might not have the time to focus on payroll anymore. You also might not feel comfortable utilizing resources to implement an in-house payroll department. Outsourcing this aspect of your company could assist in making the whole business run more smoothly.
Here are four reasons why you should consider outsourcing payroll:
1. Meet growing payroll needs
In the early days of your business, payroll was probably a fairly simple task. With only one or two employees, the task wasn’t likely to take up much of your day-to-day responsibilities. However, when a company grows, so do its payroll needs. Before long, what was once an easy task becomes increasingly complicated. Classifying employees, handling filing deadlines, paying overtime and dealing with state unemployment taxes are just the tip of the iceberg. When a company reaches this point, there are generally two solutions: hire a payroll department or outsource the department and all its tasks.
2. Save time
Even if you know exactly what you’re doing when it comes to payroll, it still might not be the best use of your time. As a business owner, it’s very important to delegate your working hours efficiently. Bringing in new business and solidifying relationships with clients and customers should be top priorities. Payroll is important, but it doesn’t grow the business in a meaningful way.
Inc. Magazine noted that delegating tasks is important to running a business, and a failure to do so could spell trouble for your company. By outsourcing your payroll needs, you’ll have more time to spend on core tasks. Clichés are well-known for a reason – time is money, and spending too much of your personal time on payroll might be a waste of resources.
3. Increase security
Even small businesses with fewer than 50 full-time employees handle a lot of personal data. Information such as Social Security numbers and home addresses are readily available to those in the payroll department. This opens your business to increased risk, especially in terms of potential identity theft. Files can get lost or sent to the wrong location and someone with malicious intent could easily wreck the entire system. Inc. Magazine also reported that network flaws or on-site server malfunctions could spell disaster for your payroll department.
Outsourcing payroll is the best way to secure your employees’ information and wrap the entire department up into one convenient and secure package. Cloud-based storage with top-of-the-line security protocols and backups is the ideal payroll situation. With outsourcing, security such as this isn’t tacked on or a feature you need to upgrade, it’s built into the service. Peace of mind can be hard to get in the world of business, but this is one realm that you can actually control.
4. Avoid tax penalties
The U.S. tax code isn’t a simple document. If you’re not an expert on the subject, you could be liable for fees and penalties for late or incorrect filings. You can avoid the risk of multiple errors by outsourcing your payroll to professionals who know the tax code forward and backward.
“40 percent of companies pay fines for tax mistakes.”
Small Business Trends reported that 40 percent of small businesses pay about $485 a year in fines for incorrect or late tax filings. If the mistakes are big enough, that number could increase greatly. Outsourcing payroll not only means that you have a team of experts working to avoid these mistakes, but they might even be able to save your company money. The source noted that many businesses overpay their employees by as much as 4 percent because of inaccuracies in time records. Government compliance and accurate record keeping alone are worth outsourcing payroll.
So what’s the bottom line? When you outsource payroll, you get peace of mind with advanced security protocols, expert knowledge of the tax code, access to top-of-the-line technology and more time to grow your business. When you choose AlphaStaff to handle your payroll, you gain access-anywhere attendance systems, integrated payroll processing, secure record keeping, professional tax administration, garnishments and branded employee portals. It’s all about optimizing your company so that it can continue to grow and be successful.