Small business owners usually have to wear many hats. Not only do they have to follow their passion but they also need to concentrate on all the background administrative and accounting requirements of their business. However, anyone who doesn't have a background in accounting will soon learn that handling payroll requires a lot of time. It is crucial to make sure that everything is within the legal guidelines of the government and that pay is issued in a timely fashion. Most business owners find that they do not have the time needed to invest in this type of work, so they look to outsource this all-important task. Here are 7 ways payroll services benefit small businesses.
1.) Can Focus Better on Your Business
When you have to do payroll yourself it is time taken away from running your business. When you're concentrating on growing your business it is more important than ever that you're focusing on your growth and not on administrative details.
2.) Reduced Costs
Payroll can be an expensive job when you consider the cost of the time you invest. You can also relax when you know that professionals who fully understand the law and how to apply it in your case are handling it.
3.) Avoid Penalties
Mistakes can be very costly when it comes to the IRS. Statistics show that the average small business that handles payroll themselves pays as much as $845 per year in either late fees or penalties for mistakes in filing. With payroll services you're ensured that you won't have to pay any penalties for incorrect filing or late payments.
4.) Direct Deposit
Payroll services are also set up to provide direct deposit for your employees. Making a trip to the bank each payday is not only time consuming but also inconvenient. Offering your employees a direct deposit is a way to cut back on the extra paperwork involved with issuing paychecks each pay period. It is more convenient for you and for the employee.
5.) No Headaches
Keeping up with payroll requires you to always keep abreast of the latest software and the constantly changing tax laws. Using the wrong tables can cause you many problems with your accounting, taxes, and insurance. By using a payroll service to keep on top of these things you'll avoid all the headaches associated with it.
6.) Use of Outside Experience
When you outsource your payroll needs, you tap into outside expertise in several different areas. The right service will be knowledgeable about withholding rates, government requirements, and will know how to keep up with the constant changes that are happening in the industry.
7.) More Security
As a small business, you likely do not have the resources to hire an HR team. Quite likely you have one bookkeeper or an accountant to handle this work. However, if they were to find another job you'd be in dire straits. By using an online payroll service your business will be more secure in knowing that they won't quit on you.
As a small business owner, staying abreast of the constantly changing requirements for payroll services, handing your payroll will become increasingly difficult. It makes more sense to take advantage of all of the experience and skill offered by these services.