Payroll Processing: Should you DIY or Use a Payroll Service? (Part II)

Continuing our discussion on DIY vs. using an outside payroll company, here is a look at what is involved with outsourcing your employee payments to a professional payroll processor:

Considering a Payroll Processing Service: Payroll service professionals devote all of their time and resources to processing pay checks, making tax calculations, and preparing to allocate employee pay amounts correctly.

Here are some of the commonly cited benefits of using a payroll service company:

– Payroll is complicated. There are a lot of numbers to track, rules to abide by, and information to follow. It is more than a one-person job. When you use a payroll service, you put your payroll into the hands of professionals who are trained specifically in making sure your numbers are balanced and your checks are processed correctly.

– As mentioned earlier, small business owners have a lot of demands on their time. Outsourcing payroll makes sense, especially for smaller operations that cannot afford to create and maintain their own HR or payroll department. Using a payroll service eliminates the time consuming task of manually calculating paychecks, and reduces your financial risk of fines from a missed tax filing. More importantly, using a payroll service gives you more time to focus on running your business.

– The Internal Revenue Service (IRS) has reported that one out of every three employers has been cited for a tax-related payroll error. This equates to billions of dollars in penalties. A reliable payroll service will ensure that this does not happen to your organization.

– When using a payroll service, processing payroll only takes minutes to process. There is no requirement to count benefit amounts, vacation or sick pay allotments, or disbursements to worker benefit or savings accounts. You simply enter in the amount of hours (vacation or sick days for salaried workers) and other pay data (commissions, bonuses, etc.) and the payroll service does the rest. This usually results in a significant savings of resources.

– Payroll service providers are experts in this area. They know how to navigate the complex maze of state, federal and local tax laws, and regulations. A professional staff dedicated to making sure your payroll is on-time and accurate brings a whole new level of expertise to your business, one that would be very difficult to accomplish in-house even if you had the resources to create your own payroll department.

– You can reduce your risk. As the company’s manager, keeping up with all employees’ time clocks, taxes, and benefits, (not to mention constantly changing federal and state regulations) can become a huge burden. Payroll service experts can take that burden off of your shoulders.
The Bottom Line

Engaging the expertise needed to fully administer your payroll ensures that you don’t have to spend unnecessary time and resources on it. Using a payroll service also ensures that your payroll is accurate, compliant with all government regulations, and delivered to your employees on time, every time. Payroll paperwork and administrative tasks are completed by them, so you can count on their expertise when addressing any payroll-related questions posed by you or your employees. In the end, it can save valuable time and resources trusting the administration of paying your employees to a reliable and reputable payroll processing service.

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