When operating a small business, it is of the utmost importance that core operational functions be performed at optimal levels. For many companies, too much time has to be focused on other activities, such as payroll, leaving little opportunity to expand the company through exceptional customer satisfaction. An excellent way to overcome this obstacle is by outsourcing payroll tasks to payroll companies. Here is a quick overview of payroll companies, including what they are, what they do, and why they are of such benefit.
What is a payroll company?
A payroll company takes on the responsibility of handling payroll-related tasks for its clients. This typically involves sending out pay slips to the workers, recording the amount of money being paid out to the employees, including wages, salaries, bonuses, and also the documentation of any withheld taxes. As you can imagine, the higher the number of employees that you have, the longer it takes to complete payroll-related tasks. Even as a small business, payroll activities often require a full-time employee or service provider to ensure they are properly performed.
The advantages of working with a payroll company?
When you work with a payroll company, you are able to focus your time on core operational functions, such as product development, marketing, customer satisfaction, etc. Without optimal levels of performance in these areas of operating a business, you will see decreases in both your customer count and profit levels; this is why it can be of such value to outsource your payroll tasks to a company that excels in payroll effectiveness and efficiency. The less you have to be concerned with payroll tasks, the more time you can devote toward your core operational functions, thus increasing your customer count and boosting your profit margin and levels.
How much do payroll services cost?
The amount of money that you will invest in outsourcing your payroll activities will be determined by how large your business is. The smaller the business, the fewer the tasks to be outsourced, meaning the less amount of money it will costs. Take for example that you are a small business employing only 10 workers. Outsourcing your payroll tasks to a payroll company will of course cost less than if you were a small business employing 40 workers.
How to choose a payroll company?
Choosing a payroll company for your small business can seem a bit daunting at first because there are so many companies to choose from. Please keep in mind, that there are several factors you can base your decision on. Not all payroll companies offer the same types of services, so you will first need to determine which services you are in need of, like payroll processing, garnishment payment deductions, detailed payroll reports, etc. You will also need to consider the reviews a payroll company has. Ideally, it should have a strong reputation among its clients and should be able to provide you with multiple references. And don’t forget to see if the payroll company requires you to sign a contract for service. A company worth acquiring services through won’t make you sign a long-term contract, if any at all. Instead, it will allow you to pay-as-you-go or sign a month-to-month service agreement.
What services do payroll companies provide?
There are multiple services offered by payroll companies. Here is an overview of the typical ones you can expect just about any payroll company to offer:
- Balancing payroll data
- Reconciling payroll data
- Depositing taxes
- Reporting taxes
- Wage deductions
- Record keeping
- Analyzing payroll data
- Verifying payroll data
- Direct deposits
- Deliver payroll checks
- Maintain compliance with tax laws
- Record paperwork information for new employees
- Edit existing employee payroll data
- Calculate reimbursements
- Determine bonuses
- Record overtime pay
- Record holiday pay
- Mobile access of payroll data
- Paid-time-off management
- Employee self-service
Why you should use a payroll company?
If you have found yourself burdened in regards to understanding and the time of calculating payroll, you will likely benefit from outsourcing the activities to a qualified and reputable payroll company. A simple mistake in your payroll can cost you thousands — even millions — of dollars. With an insured payroll company performing the tasks for you, though, you can rest assured any mistakes won’t fall back on you.