Why Your Company Should Look Into Payroll Processing
Operating a business is difficult and requires owners to take on multiple stressful, time-consuming responsibilities they may not have time for. Paying employees is one more responsibility for every business owner to deal with. Employees may loss morale, quit, talk bad about, or sue your company if they aren’t paid on time or in the correct amounts. Also, business owners must keep up with payroll-related details to adhere to applicable state and federal regulations. Proper payroll is a must for every kind of business.
Many small businesses and companies with busy owners pay employees individually, manually tracking hours worked, any commissions earned, and bonuses. Manually taking care of payroll often results in errors in amounts paid and when employees are actually paid. Payroll processing, or performing payroll through a computerized system, eliminates struggles associated with manually taking care of payroll. Let’s go into further detail and explain the complete benefits of hiring a payroll processing company.
Save time spent on payroll
Every company must pay their employees — no business is a charity case — and does not require creative thinking that experienced company owners provide. Payroll, with the exclusion of hiring new employees and existing employees leaving, is highly repetitive. As such, company owners who manually take care of payroll without using payment processing tools spend time doing monotonous payroll they could allocate more effectively elsewhere.
By utilizing a payroll processing company, you will never take payroll-related time-outs, leaving managers and employees wondering what tasks to perform next without your guidance.
Never forget to pay employees
Without a payroll system, you must remind yourself to carry out payroll. This often results in forgetting to carry out payroll in a timely manner, causing employees to get disgruntled or even leave their positions. Paying employees just one day late can result in them not paying rent or utilities on time, having food to eat, or transportation to work. Payroll processing systems are more than just a reminder, as failing to take care of employees equals less productivity for your company.
Employers must pay employment taxes
Employment taxes such as Medicare and Social Security must be matched to employees’ contributions in the United States in a 1-to-1 ratio. For every $100 employees pay to Uncle Sam in taxes, employers absolutely have to match $100. Missing employment tax payments or not paying them in full can result in hefty fines. Just two years ago, the Internal Revenue Service — gotta love ’em — enacted $4.2 billion in response to employment tax gaffes, goofs, and omissions.
Few business owners actually try to cover up employment taxes, as most employment tax-related errors are honest mistakes. Manually taking care of payroll is far more likely to yield employment tax errors as compared to using payroll processing company. You do the math — payroll systems prevent costly employment-tax related errors. Sometimes, companies do not have sufficient working capital to pay these penalties in full, resulting in needs to take out loans or even close their doors.
Payroll mistakes are annoying and time-consuming
Not paying employees in full or on time results in a wealth of detriments, ultimately resulting in disgruntled, unhappy employees. Being forced to reconcile payroll mistakes subtracts time you could have spent towards other, more important company needs. Manually carrying out payroll need already takes up valuable time, let alone fixing mistakes caused by analog entry and calculation. Besides, dealing with these mistakes are simply annoying, causing stress, which may result in less-than-optimal performance elsewhere in your business.
Allocating time elsewhere is more profitable
Any detail-oriented, diligent employee can carry out payroll. As such, taking care of payroll as an owner is a waste of time. The hours you spend each and every week taking care of compensating employees are better spent towards other functions, such as making decisions and evaluating potential business changes.
Provide more interaction to employees
Encouraging employees to interact with company-related functions on and off the clock may boost employee morale. Also, allowing employees to check on amounts owed and hours worked helps them calculate taxes or anticipate how much they will be paid. If employees call in to ask this information, it also takes time away from your company’s employees. Processing payroll with a payroll processing company both saves your company time and makes employees happier.
Payroll processing companies include support
When you hire a payroll processing company, you get troubleshooting support for your company. Payroll processors do offer support for comprehensive lists of problems, providing protection for payroll problems your company incurs.
Hiring a payroll processing company beats out manually performing payroll tasks for a variety of reasons — more reasons than could be included here. Utilizing a payroll processing company saves you valuable time, prevents tax-related problems, and ultimately helps your company succeed.