Running a business is no walk in the park, especially when it comes to finances.
You likely dreamed of working for yourself, building your business empire, and honing whatever skills you decided would be your forte. As your company grows though, you’ll need to hire a few employees, and you’ll need to pay them every two weeks or so. Rather than cultivating your business dream, you might find yourself staring at countless spreadsheets, nursing a headache and unable to move on.
But your employees and finances are the things that keep your business afloat, and without them, you’ll most likely fail.
Fortunately, you can rely on a third-party service provider to help manage your payroll needs. Here are the top 5 benefits of doing that.
1. Time Savings
Payroll accounting is quite tasking. The payroll department has to consider some complicated and minute details with regards to things such as terminations, new hires, deductions, garnishments, to name but a few. Plus, any slight change in state and federal regulations makes it even more intricate.
Each year, businesses opting to manage payrolls internally end up wasting away precious working hours preparing spreadsheets – or worse if mistakes are made. Outsourcing payroll management to a third-party professional unburdens you from this world of spreadsheets or expensive software. It also frees up your HR unit’s time, which can be better utilized for crucial functions that are strategically more important for your growing business.
Remember, payroll is not a one-off thing. One payroll quickly follows another, and the labor hours in between never seem to be enough.
2. Avoid Tax Penalties/Mistakes
No year goes by without small businesses paying hefty IRS fines. According to the IRS, 40% of small businesses pay a penalty of $845 every year for incorrect or late payroll tax filings.
Payroll mistakes shouldn’t be taken lightly, because not only can this anger your staff, filing with inconsistent details or omissions raises a red flag. These errors then lead to painful events such as audits or heavy penalties.
Since third-party payroll experts have to continuously stay on top of all federal regulations, they can manage accounting and filings with extreme ease. The best part is that they do it at a very minimal cost, which would easily cost you many hours of work and penalties if you opted otherwise.
3. Easy Access to Payroll Software
It’s common for businesses to execute their payroll in-house, often using forms of obsolete technology. This practice still often results in late and incorrect filings and can cause your organization to waste away valuable time.
Using a 3rd party payroll company will give you access to a much more sophisticated payroll system then you’d likely spring for on your own and allows your company to cut overhead costs. Plus, your employees get to have unlimited access to vital information in a faster and convenient way.
Below are some examples of how business owners and employees benefit from real-time HR information.
Employees gain access to:
- Up-to-date information
- Review benefit information
- Online benefits enrollment
- Review checks
- Any corporate filings
Business owners gain the ability to:
- Access and update staff information
- Monitor PTO (Paid Time Off)
- Upload custom benefits documents and benefits plans
- View payroll reports and invoices
- Create custom payment reports
Hiring the right payroll expert with a Human Resource Information System (HRIS) is a prudent move. It allows businesses to make the most of this platform without the additional expenses of buying and servicing it.
4. Protection of Employee Data
Does your business have enough storage space to house all of your employees’ data? It’s crucial that your data is regularly being backed up at a secure location in today’s digital world. It should also be easily accessible should you be audited.
In some companies, reports are pulled on a weekly (or daily) basis. This data adds up fast! Outsourcing payroll services allow your staff data to be housed in a secure location without taking up costly internal server space.
Moreover, data security and protection measures, backup systems, and multiple server locations ensure no one tampers with your confidential information.
Providers usually invest heavily in having such cutting-edge solutions in place, which is cost-prohibitive for you to install in-house if you are a small company. Manual data storage cannot help prevent fraudulent intrusions as these advanced systems can do. Therefore, outsourcing payroll services is often a more secure way to handle the data.
5. Round-the-Clock Access to a Team of Payroll Experts
Third-party agencies can provide a team of payroll professionals who study and research a lot about federal regulations. These experts are always on-call to help you in the event of emergencies. For instance, if you get a notice for an inspection or audit from the state, the experts at your payroll agency will come and help the investigating team. You won’t have to worry about such inconveniences at all.
Besides, tackling employee concerns, staff compensation, and human resource, in general, are handled pretty well by such professionals, which is a huge bonus for you as a growing business!
When looking for a good payroll agency, you should also find out if they offer the 401k plan. These transactions are an integral part of payroll outsourcing, and so the inclusion of the plan will help your business hire more competitively.
Payroll is both an integral part of your business and a crucial part of its expansion – it shouldn’t be ignored or taken lightly. In-house payroll can be a complex and tedious process, but outsourcing can help you experience the full benefits of data and payroll insights. With a well-known service provider, you can rest easy knowing that your small business is in safe hands when it comes to achieving reliable, cutting-edge, and secure payroll.
Want to make your payroll journey smooth? We offer payroll support and a range of other top-of-the-line services to small businesses. When outsourcing your payroll to us, you can be sure that all essential financial tasks will be handled accurately, leaving you to focus on what you are best at: running your business. For more information, feel free to access the Avitus Group Payroll services fact sheet today!