Outsource Payroll Processing - The Payroll Company

How Can I Tell It’s Time to Outsource Payroll for My Small Business?

As the owner of a small business, you play so many roles—from visionary leaders to day-to-day operations managers.

Though this hands-on mentality is often essential, some areas of your business can get bogged down and time-consuming, such as payroll and HR.

Feeling buried under piles of paperwork and compliance headaches? You may want to think about outsourcing. Here are five strong indicators that outsourcing your payroll and HR functions might help your small business.

More Complex Environment for Compliance

It’s no small job to navigate the maze of federal, state and local labor laws. Things are constantly changing in the space, and keeping up with it can take a whole work life.

If you are having trouble being compliant, get audited often, or are subject to expensive penalties, this should be a warning that your current system is not functioning.

This ensures your business remains compliant so you can avoid non-compliance and the costly fines that accompany it by outsourcing payroll to a team of professionals trained in HR and payroll.

High Administrative Burden

Handling payroll and HR in-house can be a huge time sink. Each hour spent on this administrative work is an hour that wasn’t dedicated to core business activities fueling growth and profitability.

If you’re spending precious time and resources on payroll processing, benefits administration and handling employee relations, it’s a strong sign that outsourcing could help increase your efficiency and productivity substantially.

Growing Workforce

Growth is the indicator of a healthy business, but with an increasing number of employees, comes the increasing complexity of maintaining one.

With a growing team comes a growing list of payroll records to maintain, benefits to manage, and HR issues to deal with. If your internal resource is struggling to keep up with the rapid increase in the number of employees, then outsourcing is the way to go; offer the scalability involved in meeting these tasks adeptly and efficiently.

Frequent Errors in Payroll

Payroll errors aren’t just a pain point — they can also be expensive and negatively impact employee morale. Mistakes like wrong payments, delay in payments or tax filing errors can result in disgruntled employees and possibly even legal troubles. If your business can’t seem to get its payroll right, your system is not up to the task. Payroll service professionals guarantee accuracy and punctuality, and help you keep a trained and motivated workforce.

Limited Expertise

Small companies usually do not have the funds to bring on full-time HR and payroll specialists. It can result in oversights and inefficiencies if your team does not possess the key skills required to resolve complex HR-related queries—such as employee relations, benefits administration, or legal compliance. By outsourcing your HR functions to specialists, you will gain access to a vast amount of knowledge and experience to ensure that your functions are handled both effectively and professionally.

The Payroll Company Advantage

At The Payroll Company we understand that no two small businesses are the same; we all have our own unique challenges.

Our integrated HR and payroll solutions free you up from you entire HR process, save on administrative costs, and support the growth of your business in every way compliant with the appropriate regulations. This allows you to do what you do best run your business and serve your customers giving us time to focus on our specialties.

Final Thoughts

Taking payroll and HR functions from your small business and outsourcing it can be a game-changer.

After identifying these signs and taking some proactive steps, you can help improve efficiency, reduce risk and create a more productive work environment. Stop letting administrative hurdles stop you, rely on The Payroll Company and elevate your business.

2021 and It’s Time to Finally Outsource Payroll Processing – Here’s Why

2021 and It's Time to Finally Outsource Payroll - Here's Why

Businesses are required to complete and meet obligations to employees. Payroll problems are difficult for today’s high-tech business world. A business’s payroll division oversees multiple components of employee compensation. It manages payroll processing, direct deposits to employee’s bank account, FICA, FICO, State Income tax payments to government entities including the State and the Federal Government, reporting requirements, time and attendance tracking, company payroll management reports, worker’s compensation, 401k’s plus other types of retirement account reporting, unemployment claims, vacation time-off and more. This is a giant set of tasks to manage for a small business while running the business itself. Putting time into these tasks means a business owner is not focusing on building and managing current business.

What is the Appropriate Amount of Time to Spend on Payroll?

The practical way to answer this inquiry is a business owner needs to calculate the amount of time spent working on payroll each week, every two weeks or month and multiply it out for 52 weeks, 26 weeks or 12 months. After the totals for each segment of time are calculated, a business owner needs to look at the true cost of working on payroll by comparing it to the amount of business not generated related to working on payroll instead of managing and building the business. To make the comparison and analysis useful and valid each payroll task needs to be included in the assessment including managing tax reporting, employee benefits, retirement funds to new name just a few. Several studies over the years indicated in real numbers that business owners spend 3 full weeks a year dealing with federal tax problems. Add all the hours spent dealing with all the other payroll problems and tasks and it becomes readily obvious managing payroll is costly from both a time and business growth perspective. There’s not a fixed number or an empirical study out there that provides when a business owner should hire a payroll processing company, instead of doing it themselves. However, it’s easy to assess if an owner is spending 10 – 20 % of their time working on payroll and all its accompanying issues it’s likely a smart move to hire a company to process payroll to save time and money and then put those savings into managing and building business.

Look at the questions below to determine if it’s time to hire an outside payroll processing company:

Is the time spent on payroll exceeding your comfort level?
Is your business growing, adding more employees and now is
payroll becoming a much bigger task than before?
Are payroll mishaps become more costly due to tax penalties assessed
for filing errors charged by the IRS?
Is payroll taking up so much time that the critical time needed
to manage and grow your business is compromised.

From a logical assessment perspective, if the responses to this set of questions happen to be yes, it’s makes good sense to outsource payroll processing. The monthly cost of payroll processing fees, while not nominal, is affordable for most businesses. The benefits of outsourcing payroll processing are time-savings, cost savings generated from reduction in penalties and fines and the improved ability to focus time on and energy towards building and growing your business.