Skip to main content

How to Outsource Payroll as a Small Business?

Outsourcing Payroll Services  offers an attractive and valuable alternative to small business accounting services. If chosen wisely, outsourcing payroll can be a less expensive, simplified way of paying your employees, filing your taxes, and performing a host of other duties offered by the third party.
As you know, payroll is a complex and stressful task while managing so many other business activities. Managing payroll is an important aspect of your business. Small businesses often lack resources, time and money to handle in-house payroll. Payroll is not just about making sure your employees receive salaries on time but also paying government taxes to state, local and federal. Your documents must be filed on time and correctly.

What is payroll outsourcing?

In the market, there are payroll specialists  who can handle the payroll processing on behalf of you. These outsourcing payroll service providers do everything from calculating pay and deductions to transferring money to your employees accounts and filing taxes associated with it. They provide services based on your needs and what part of services you can afford.

Why outsource payroll?

In-house payroll can be a complicated and tedious process. There are legal requirements and if done wrong, you might be at risk. So, for the peace of mind and to concentrate on other core activities of the business, small businesses leave payroll processing to the experts. It’s relatively cheaper to outsource as the third party uses a software to automate many of the tasks involved.

What all can payroll providers do?

Payroll providers can offer the following services based on your needs:
  • Working out pay (including benefits and reimbursements) and deducting payroll taxes or retirement contributions
  • Keeping the payroll records
  • Making payments to the employees
  • Filing and paying taxes with the IRS

How to choose a good payroll service provider?

Payroll is a complex part of a business. You would get the payroll right that meets your needs. Consider the following points while choosing a payroll service provider:
  • Get the right level of service:
Make sure your provider is giving you the right level of service- only services that are required by you and you’re not overpaying. Understand what you will be handling in-house and what extra services you're paying for.
  • Automate the easy stuff:
Make sure your professional is using software to ultimately do easy stuff so you don't pay professional fees for an admin job.
  • Secure your data:
Before finalising your service provider, ask them about data security and privacy policies. Ask about the safeguards they have to keep your data protected.
  • Work with what you have:
Check what your accounting software can do. Make sure your accountant is familiar with the software that will help ease the work and make full utilisation of time and resources.
  • Work with who you know:
Do you know some of the bookkeepers and accountants can also do the payroll task? Ask your bookkeeper or accountant if they provide payroll services.

How to outsource your payroll services as a small business:

  1. Determine your needs:

Before finalising a service provider you need to understand your requirements- what you need a third party to do.
You must have the answers about these given questions.
  • Do you have staff or contractors? 
  • How do you determine the difference? 
  • Do you need payroll to plug into your accounting software?
  • What taxes do you need to pay?
  • Do you pay out bonuses or expenses?

  1. Do your research:

It is about receiving the kind of outsourced payroll service you want to use for your company (mostly depends on the size of the company)
Small businesses have myriad of choices when choosing to outsource their payroll:
  • Local payroll firms
  • Accountant
  • Bookkeeper
  • Larger companies like  ADP, Ceridian, Paychex or Intuit etc. 
  • Online Payroll SaaS companies such as Wagepoint, Wave, ZenPayroll etc.
There are pros and cons of the choices you have but it all comes down to the solution that is right for your business. The option of larger companies payroll providers may not be suited as a small business. Using an accountant or a bookkeeper is a great option as the in-house can do all the remittances and reporting for you but the cost may add up for each item separately.
SaaS companies provide an interesting solution because you may not pay on subscription model, usually what you use, this can save you time and money.
Consider the above options while choosing a payroll service provider- shortlist the companies, pros and cons, price etc.

  1. Make a connection:

When you outsource, you are trusting a third party would provide the service with care. Check the company has a good reputation about their payroll work. Is the company nice to do business with. You have to deal with these people every month to make sure they are best to get along.

Conclusion:

Outsourcing Payroll Services can be cost-effective and efficient for your small business. It’s the easiest way to take the burden off. So, choose your payroll service provider wisely.
Reference URL -  https://ledgerbench.hatenablog.com/entry/payroll-services
Labels:
Location: United States

Comments

Post a Comment

Popular posts from this blog

What is Statutory Compliance in Payroll?

Payroll is a complex process with changing legislation, varying allowances and deductions and compliance issues. Many businesses manage payroll in-house while some outsource it to a third party. The goal is to adapt constantly changing legislation and to avoid compliance risk. One of the most important concerns of an employer is to meet statutory compliance in payroll. Payroll is one of the most regulated functions in an organization that must meet federal, state and local jurisdictions requirements.  What is Statutory Compliance ? Compliance is the process of fulfilling official requirements.  Hence, statutory compliance is a legal framework to which organizations must abide by. In nutshell, statutory compliance means adhering to rules and regulations.  A lot of hard work, time and money goes in to make sure payroll is compliant through statutory audits. Each company has different payroll challenges, but what you need is the solution that must be reliable, i...
1 comment
Read more

What are Operating Expenses? (Explanation) - Ledger Bench

  Operating expenses are incurred by businesses to keep the business going, includes staff wages, supplies not include manufacturing cost. Operating expenses does not include manufacturing cost or cost of goods sold (direct labor, material, manufacturing overhead) or capital expenditures (building or machinery)  What is included in Operating expenses? Following are included in operating expenses: Insurance Rent Research Utilities License fees Accounting fees Office supplies Attorney fees Vehicle expenses Travel expenses Payroll for staff excluding labor for manufacturing  Marketing including social media channels such as Facebook Building maintenance and repairs Property taxes on real estate Operating expenses are reflected in the company's income statement. What does an increase in operating expense mean? An increase in operating expense would mean less profit for a business. Often operating expenses receive ...
1 comment
Read more

When we need to outsource accounting & bookkeeping?

Business needs both financial and management reports for the growth of its company. Your business needs basic financial reporting for compliance and making sure your books are accurate. As the business grows, you find it difficult to tackle every aspect of your business. Most bookkeepers only know how to handle billing, collections, deposits, payroll etc. When you reach a point where a bookkeeper is not sufficient this is when outsourcing comes into the picture. Accurate and timely accounting is vital to keep your business afloat.  What is outsourced accounting and bookkeeping? Outsourcing accounting and bookkeeping is a service which provides full accounting experience for small businesses. An outsourced accounting department handles day to day transactions of the business, accounts payable, accounts receivables, payroll, management financial reporting and many other services. Outsourcing offers a team of professionals at a lower cost as compared to hiring in-house.  ...
1 comment
Read more