Why would you outsource your payroll? Are there any benefits? Jellison CPA would say “definitely”. Below are some key factors why businesses decide to outsource their payroll.
Time Savings/Productivity – Payroll processing in-house is a time-consuming process. Keeping track of garnishments, new hire/terminations, paid time off as well as federal & state regulations changes can be frustrating tasks. Significant hours are spent preparing W2s & ensuring that they are sent out timely. Outsourcing payroll immediately frees up a business owner, human resources or accounting personnel to work more on strategic tasks that could ultimately affect your bottom line. Employers only need to make contact with their outsourced payroll specialist by approving time once each pay period.
Reduce Cost – Direct cost of processing payroll can be greatly reduced by working with a payroll provider. If your business has fewer than 30 employees, there is a very good chance that you can save money by outsourcing your payroll operations. You would have no worries about your payroll processing company calling in sick, resigning, wanting to take a vacation. There’s also the matter of confidentiality when it comes to payroll. If an employee wants to “share” how much a fellow employee is making that can cause extreme drama in the work place.
Avoid IRS penalties/Mistakes – It has been reported by the IRS that 40% of small businesses pay an average of $845.00 per year for late or incorrect filings & payments. Mistakes lead to audits & penalties – situations NO business wants or needs. Professional payroll providers must stay current with rules, regulations and changes in tax rates. A good payroll-service provider is far less likely to make a serious error than your in-house staff.
Enhanced Security – Payroll processing is a complex and potentially risky business operation. Even with long time trusted employees, there is always a risk of identity theft, embezzlement of funds, or tampering with company file for personal gain. A quality payroll provider invests in state-of-the-art systems for storing & protecting data, simply because it is part of the service provided to clients.
Losing payroll expertise – Every business with in-house payroll runs the risk of receiving notice that your payroll person is taking an extended vacation, FMLA, fell ill, took another job or not able to do payroll. With a payroll service, output speed and quality won’t vary in accordance with vacations and illnesses.
Offer Direct Deposit – Providing direct deposit to employees is difficult if a company doesn’t use an outside payroll service. Small businesses recognize that employees want direct deposit. Direct deposit eliminates time-consuming and error-prone paper handling and the need to reconcile individual payroll checks every month. Using direct deposit reduces the risk of fraud by eliminating the use of paper checks that could be altered or counterfeited. Unlike a paper check that bears your account number for all to see, when you use direct deposit your account number remains confidential to your financial institution or payroll provider. Confidentiality is another benefit of outsourcing payroll.
Worry/Peace of Mind – With the help of a professional payroll service provider, the hassle and pain often associated with processing payroll is gone. You provide the basic information and your payroll company takes care of the rest. And with guarantees of error-free payroll & tax filing and payments, you can eliminate the worry that many experience when it comes to paying employees and taxes correctly and on time. There is a lot to be said for the peace of mind that outsourcing payroll service can bring to a business owner or manager. You are left to focus on running a profitable business. A clear focused mind is one of the true benefits of outsourcing payroll.
Give Jellison CPA a call today for your payroll quote. We would be happy to help you achieve a focused mind!!