Why You Should Consider Outsourcing Your Payroll

Payroll outsourcing, many entrepreneurs find, is a bottom-line money-saver; the main reason for this is the myriad rules, regulations and filing deadlines that are associated with payroll functions and the time it takes to learn, understand and apply them. The outsourcing of payroll will also save the business owner both time and money and both of those assets can be funneled back into growing the business.

Basic payroll functions that can be outsourced include: calculating and cutting paychecks, tracking paid time off, providing payroll reports, filing required paperwork with taxing authorities and making certain that payroll tax obligations are addressed.

As a business owner you know it’s crucial to focus your efforts on mission-critical and money-making endeavors. When interviewing a company to provide these services to your company you will want to look for a firm that offers accuracy, ease of use in reporting hours worked, speed in responding to your questions and concerns and references from current clients utilizing the service.

Here are five items to consider when making the determination on whether your company will benefit from outsourcing of your payroll duties:

  1.  What are the costs associated with your doing the payroll internally? To determine whether you’ll save money outsourcing, you need to have a baseline cost against which to measure it.
  2. What are your payroll needs? How complex are they? You will want to find a payroll partner that will listen to your concerns and that offers a payroll plan that you can customize to your company’s unique needs.
  3. How much time do you have to keep up with the ever-changing tax laws? Filing inaccurate, inadequate or incomplete payroll taxes can lead to penalties being levied by the IRS; these levies can be substantial. Payroll professionals make it their business to keep up with the latest rules and filing regulations.
  4. Ask for an evaluation of the payroll services your company needs. Even if you’re a solopreneur, you may want to consider using a payroll service. Cutting yourself a check may be beneficial; ask your accountant for advice on whether you should be paying yourself a regular paycheck.
  5. Ask what the start-up costs are and whether you’re going to be tied to a specific contract for services. Remember that when it comes to outsourcing, the lowest price may not be the only factor to take into consideration. You need to look for a payroll company that has the best services, features that you need, quality referrals and someone with whom you feel comfortable working.

Only you know what’s best for your business’s bottom line, but focusing on your core competencies always outweighs struggling to do tasks that don’t enhance your business income.



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