Do I Need a Payroll Service?
A business has many things it must accomplish in order to succeed and grow. One of the most important aspects of it will be having an efficient payroll system. With the payroll being done internally, a company will have to hire and train additional employees to handle all aspects of payroll. This includes such things as meeting tax obligations, processing employee payments as well as managing every aspect of the taxes involved. A company will have to buy payroll software and train individuals to use it. This will cost money, time, and effort. It could take away valuable resources that could be directed toward growing a company’s core business. Outsourcing payroll to a payroll service could provide a number of important benefits.
The tax requirements put upon businesses are always changing. The chances of making an error increases with each new regulation from the Internal Revenue Service (IRS) and other taxing authorities. A professional payroll company has compliance with tax regulations as part of its core business. They will know what is needed when it comes to meeting the payroll taxes requirements of local, state and federal governments. They will know the how to comply with the latest tax codes, government forms, tax tables, deadline filings, deposit requirements and more.
It has been estimated by the IRS that every year over 39 percent of small businesses pay a penalty to them based on late payments or incorrect filings. It’s important for a business to take their tax obligations serious. Many payroll services provide their customers with a tax guarantee. Their customers will not have to pay any tax penalties because the payroll service will be responsible for any fines that happen as a result of their payroll errors. This can save a company a lot of problems and money.
When a company handles their payroll in-house, there will be a significant cost involved. This cost can be decreased significantly when the services of a payroll provider are utilized. To understand the cost savings, it is important a company estimate the number of labor hours it is going to pay for activities related to handling payroll. This could involve using computer software, program maintenance, support, and training, keeping current with all changes in tax laws, tax rates and more. There are also w-2’s that must be issued as well as court ordered wage garnishments that must be handled. The creation of reports for accounting, paying payroll taxes and much more.
Doing payroll can be complicated and comes with a certain level of risk. Employees who process a company’s payroll are able to engage in the embezzlement of funds, identity theft as well as using the secure records of a business for personal gain. A company will have to worry about the security of their payroll data on their server or network. Since the focus of a payroll’s business is to avoid these issues, they dedicate themselves to avoiding such problems. They will have a variety of server locations and state-of-the-art systems designed to protect and store data using the best security methods. This is done for customer satisfaction as well as staying ahead of the competition.
When a business uses the services of a professional payroll company, they will be able to dedicate more time and energy to doing what makes their company successful. A business will be able to spend more resources toward hiring and training employees to improve their company’s capabilities within their industry. This could involve customer service, sales, marketing and more.
When a business has their payroll done in-house, they will spend time and effort keeping current with government forms, rates for withholding, regulations and more. When a company uses a payroll service, they will have access to years of knowledge and experience in the payroll field. It’s possible for a small business to use a payroll service and have the same level of skill and knowledge for their payroll as large corporations. A payroll service will be able to administer benefits and deductions associated with managing payroll records. They are also experts when it comes to worker’s compensation. They will know how to administer the changing class codes should a position change for a worker. It is also possible for a payroll service to work with a company to address their employee issues as well as develop strategies for the future.
All business must deal with the complicated issues involved with tax compliance. A company is legally responsible for any form of failure to report or misrepresent any type of payroll taxes to local, state and federal taxing authorities. It’s essential that a business avoids paying any of their taxes late. Any type of mistake could be expensive. This can cause a company to have a government audit. It could result in fines and other penalties and more. These types of problems are something every business wants to avoid. They can be avoided when using a professional payroll services. These professionals will be aware of the latest regulations from all taxing authorities.
It is important for a business to realize the benefits of a Human Resource Information system (HRIS System). This eliminates the need for many tasks involved with human resources to be done manually. It will increase the ability for a company to better manage its human resource needs. These systems provide a quick and efficient way to review and keep current employee payroll records. This will help a company with their budget forecasts and more.
There was a survey taken by Actionable Research. According to the results, approximately 75 percent of Certified Public Accountants (CPAs) who have small companies as clients believe these clients don’t have sufficient knowledge and experience to properly handle the demands that go with processing a payroll. Over 67 percent of the CPAs believed their client’s time would be better spent focused on their core business. An increasing number of companies are leaving internal payroll functions and contracting with a payroll service to meet their needs. This has had a beneficial impact on the current and future success of many businesses.