Outsourcing Payroll

If you find yourself too busy to devote the attention needed to all of your business operations, your clients, and your employees, outsourcing payroll can be a cost and time effective strategy.

Some of the benefits to outsourcing payroll include:

• Reduce IRS penalties – if you find yourself having to pay late payment penalties and interest to the IRS, outsourcing the duty will ensure that deposits and reports are made on time.

• Reduce costs – outsourcing your payroll functions can actually save you money over hiring a temporary person, doing it yourself, or adding another staff person.

• Direct deposit – you may be able to offer direct deposit to your employees, saving them the time and hassle of having to go to the bank.

• Expert knowledge – you will be able to have an expert in the field of payroll stay on top of the ever changing regulations, forms, and withholding rates.

• Payroll staff – if you have a bookkeeper or someone else do you payroll, if they are out of the office you won’t be left in a lurch trying to figure out how to pay payroll that week.

• More time – you will have more time to devote to other business or personal matters.

If you are unsure of whether or not you want to outsource payroll, consider the following:

• How much free time do you have? Payroll can be time consuming. If you weren’t doing payroll, what would you be doing – getting more business, relaxing, spending time with family, working on employee relations, etc? Does the time you spend on payroll affect the efficiency of your operations?

• Are you missing payroll deposit deadlines or filing payroll reports late? Late deposit penalties can be as high as 10 percent.

• How confident are you that you are able to avoid mistakes? If you make errors, those mistakes can be held against you, and penalties can be assessed. Not only can mistakes cause you money, it can anger employees, take time to correct, and in some cases bring about more government scrutiny if the mistake is significant.

The decision to outsource payroll is one that should not be taken lightly. Even if you do decide to outsource your payroll functions, you are still ultimately responsible for your federal tax liabilities and payroll reports. You can outsource these functions, but if the payroll service fails to make the tax payments, the IRS will hold you as the employer responsible for taxes, penalties, and interest. For more information please contact Bethany.pursifull@bellandcompany.net.