Take a minute to review the pluses and minuses
of switching your business to an outside payroll processing services provider.
Featured below are both the pluses and the minuses.
- Time savings – Several surveys over the years completed by a variety of business associations have reported that business owners place payroll and payroll taxes as the number 2 task that takes up the most time and creates the most hassle of all the tasks categories it takes to run a successful business. It’s obvious that running payroll 1 to 4 times a month requires a ton of time and focus to complete. Switching to an outside payroll processing service provider frees up time and improves effectiveness for most business owners.
- Reduction in Expenses – Each pay period requires completion of a long list of required tasks including preparing and paying mandatory payroll taxes, running payroll reports, figuring out wages for the entire company staff, printing, signing and handing out payroll checks.
- Better Company and Employee Data Security – In 2019 payroll processing service providers provide, mirrored backup systems, several server farms, the most up-to-date technology, solid secure SSL (secure socket layer) firewall protected systems to safeguard private employee and company information and data.
- Keeping Current with Regulations – It is hard to stay compliant and current with payroll tax laws and payroll taxes. The financial penalties are huge. Payroll processing service providers know all the rules and regulations like the back of their hand. Their primary objective in running their business is implement this knowledge, process your payroll for your company and keep you current with all requirements and regulations.
- Ease of Use Getting Wage Reporting and Employee
– Certain payroll processing service providers do not offer reporting
on payroll costs and other critical data about employees due to the fact they
do not have the information or because the data is on their servers, which your
business does get access to for various reasons.
- Time Issues on Fixing Payroll Mistakes –
Payroll companies are sometimes slow to respond to payroll errors. If the
company or the employee needs aren’t met when it comes to payroll errors, it is
bad for everyone.
- Payroll Services Pricing –
In some instances payroll processing service providers do not customize pricing
to fit a company’s needs. Check to make sure the services provided fit your company’s
needs and not the other way around.
- Chance Your Payroll Processing Provider Closes
Its Doors – Businesses close all the time. It can be due failure,
loss of a primary partner or any number of reasons. If this were to happen to your business, you
may lose out on access to company payroll data, employee data and potentially
your company’s money.
minuses described here do not have to be part of your picture. The main thing
to make sure you do is your due diligence in checking out the company thoroughly
first. Use the following guidelines to make a smart payroll processing service
- Recommendations from associates, mentors and business owners
- Documented credentials including time in business, similar company
payroll processing experience and confirmed business licenses.
- Confirmed quality customer service and personal attention to
- Services and support offered meet your company’s needs
- Pricing and additional fees or charges are documented upfront
- Reporting of data, data reporting needs and security of data are
In today’s modern web-based technology world,
companies can choose from multiple options to complete payroll. Business owners
that opt to do it themselves is one way and businesses that choose to assign
the task of doing payroll to a department, like human resources, is another way
to go. Lots of businesses choose to go to a provider outside the company for
payroll processing like a bookkeeper, accounting firm or an online payroll
processing company. The rub lies in figuring out which method is the best way
for your company to do its payroll.
Small-business owners need to take a hard look
at where their time is best spent. Look at how much time is being spent now by
you each month doing the company payroll. If the answer is too much where for a
small monthly fee payroll is completed and the time is gain is used closing new
sales. Review your payroll to make sure you are current with all state and
federal laws, rules and payroll regulations. If you’re not sure or you’re not
current, it might be time to switch to hiring a payroll processing provider.
Look to see if you’re keeping all your company’s and your employee’s financial
data well secured and private. Also, check to make sure your company’s records
for wages, benefits and retirement programs are on time, current and correct.
Payroll Processing Success, But Is It Taking
You Away from Important Tasks
You are managing running your company’s payroll successfully. However, if keeping up with running payroll, maintaining legal requirements, data security and records is eating up a good amount of your time, you may want to switch to outsourcing payroll to an online payroll processing company. Payroll processing company will calculate your company’s payroll and its associated taxes, print and handout checks, complete direct deposit payroll checks and complete all the company’s payroll reports. It will file payroll taxes, issue annual Forms W-2, set up worker’s 401(k) deductions and connect their contributions to investment account providers and keep records on benefits of employees.
Companies need to check to see if there are extra fees assessed to employees when issuing payroll themselves via debit card and when choosing a payroll processing company offering pay debit card program. Companies need to offer several ways for company employees to receive their pay. A company is not allowed by law to require employees to receive pay solely by payroll debit card. Employees must be provided several options as to how they receive their wages, not just via debit check card. It has been reported over recent years that some employers didn’t do this for their employees, which is against the law. In response the Consumer Financial Protection Bureau issued a bulletin covering legal regulations covering payroll cards. The main points on the bulletin were as follows:
- Fee Documentation – Documentation must be provided of fees
charged by the issuing bank to the employee related the EFTs (electronic fund
transfers) and written explanation about liability limits.
- Account Records Access – Regular statements must be given to
card holders by payroll debit card issuers electronically online or telephonically
providing account transaction history and fees charged.
- Unauthorized Transfer Liability Limits – Employee’s limit of
liability for use not granted if reported within a specific written time period.
- Rights to Resolution for Errors – Payroll debit card financial
institution mandated response to card holder within 6 months of occurrence of mistake
Several different organizations over recent years have provided
statements about the pluses of wages being disbursed to employees via payroll
debit cards and regarding the top ways for employers to make the most of the
program for their employees. The top recommendations included issuing pay without
fees being charged (employer pays the fees) and to provide the wages using the
top credit card brands such as VISA, MASTERCARD and DISCOVER. Employers must also
give complete documentation of fees employees may incur.
Payroll debit cards are a big part of
providing payroll to employees today that do not have a bank account. Operated
correctly, payroll debit cards provide wages at a low cost with speed, easy and
convenience to employees. The program helps both the employer and employee work
together efficiently. Look today with your local payroll company to see if your
company can save money and improve its payroll process each month by starting a
payroll debit card program as part of its payroll disbursement options.
Payroll debit cards are written about negatively from time to time in the press, but it doesn’t mean this relatively new device for delivering payroll should be done away with by companies using them issue wages to employees. Virtually every consumer transaction today to make purchases of goods and services can be done with a debit card. Cash still works, but you cannot use it very easily to purchase a plane ticket for example. Payroll debt cards have both pluses and minuses for employees and employers, but they are widely accepted and provide a huge advantage for a lot reasons. Paying wages through payroll debit cards can be issued by employers themselves or through a payroll processing company.
Advocates talk about how payroll debit cards to employers as a method to lower payroll expenses and improve company effectiveness. With delivery of payroll on a payroll debit card on payday each employee receives their pay via direct deposit on the card. This method makes it easy for companies to reconcile their payroll bank account. Getting rid of printing payroll checks and mailing or handing them out generates direct savings for companies with respect to costs, time and elimination of payroll checks never arriving or getting stolen. Payroll debits cards are a game changer for company payroll processing because they level the playing field for all employees when it comes to payday because everyone gets paid the same time with wages available to all immediately without the need accept a paper paycheck and then go to the bank or a check cashing place and cash it. Payroll debit card programs offered by payroll processing companies in some instances do have fees, making it unfair to employees receiving pay on a payroll debit card.
Payroll debit cards are part of the new era of doing everything electronically. When done right, they provide a convenient and a cost-effective way of delivering payroll and one that is mutually beneficial to both employers and their workforce. Investigate how much money your company can potentially save by implementing a payroll card program and learn how it can streamline your payroll processing.