Although running payroll is necessary, your company doesn’t earn a profit from doing it. It also does nothing to help highlight the differences between you and your closest competitors. That means that it meets the definition of a non-core function. For these reasons we encourage you to consider the possibility of outsourcing payroll. Below we discuss the three main benefits you achieve by transitioning from in-house payroll to hiring an outside party to perform this function.
Outsourcing Payroll Can Reduce Costs and Risk of IRS Penalties
While a business owner or in-house payroll employee might not take the time to see if every employee’s recorded time is correct, an outsourced payroll company will do this each time to ensure its client isn’t overpaying its employees. Additionally, business owners can avoid IRS penalties for making late or inaccurate payroll deposits by outsourcing payroll to a company that specializes in it.
Outsourcing payroll to a company like Nolan Accounting allows you to take advantage of many services beyond issuing checks to employees. For example, we offer payroll check writing, payroll debit cards, electronic time sheets, timekeeping, electronic tax filing, direct deposit, and much more. Your company specializes in its own products and services, not payroll. This is all the more reason to consider outsourcing and benefiting from these many services.
Outsourcing a Non-Core Function Allows for Greater Focus on Core Business Activities
Just because payroll is something you pay someone to do rather than bill for, that doesn’t mean you can afford to do it poorly. Making too many mistakes on employee paychecks or consistently paying them late will only end up in frustrated employees who leave your company to look for a more stable employer.
At the same time, payroll is more complex than it looks at first glance. You must keep up with local, state, and federal laws and follow them to the letter. However, paying your employees is only the beginning of your responsibilities when it comes to payroll. You also need to know how to classify an employee versus an independent contractor, when to pay overtime, and complete extensive paperwork on every new employee. The more time you spend completing these functions, the less you have to manage and grow your business.
Access to Resources and Expertise
The IRS imposes thousands of tax laws on small businesses while adding hundreds more every year. As if the volume of tax laws wasn’t enough to deal with, many of them are extremely complex for people without an accounting background. Employees also expect and demand technology such as direct deposit and the ability to look up their payroll information online at any time. Providing these options is just one of many ways for your small business to compete with larger companies.
Nolan Accounting invites business owners in Southeast Wisconsin to learn more about our payroll services by completing this form to request more information, calling 414-425-3701, or emailing firstname.lastname@example.org.