Processing payroll can be a complex and time-consuming task for any small business. The different payroll functions include determining the employee wages, withholding taxes, updating sick and vacation pay and deducting different staff-contributed payments for the benefits.
Mistakes in preparing the payroll can have a negative effect on the business and it is important to make sure that the job is performed accurately. Many businesses choose to outsource this service for a number of good reasons.
– It is cost effective
The cost of hiring the payroll service is quite affordable and you can spend about half of what it would cost to do the job in-house. Paying a salary to a full time payroll manager will translate to more money in the long run. This means that the service is cost effective and you can free your employees to focus on other important functions of the business.
– It is convenient
When you use the outside service, you can benefit from the convenience that allows you to arrange the work with a simple phone call. By simply contacting the firm and giving them details of the salary amounts, hours, deductions and any other necessary information, the firm will process the checks conveniently. You can even update any staff payroll information on the firm’s website.
– Enhanced accuracy
The professional services are experienced at their job and you can be guaranteed of accuracy. With the increase in competition, the payroll firms know that they have to provide excellent services in order to maintain your business. The service providers also ensure that they stay up to date with any laws relating to taxes and employee payroll.
– Increased functionality
Many of the payroll companies offer a wide range of additional services such as handling employee retirement plans and providing direct deposits. You can also get functions like provision of management reports. Some will also help in the preparation of W-2 forms; they calculate employee tax obligations and perform other services that the client may need.
– Ensure compliance
The payroll functions include a range of laws and regulations and when you hire the professional service, you can be sure of staying compliant. The firms can help to save you legal fees that accrue when laws are broken. When you use professionals who understand the legal issues, you can have peace of mind from knowing your business is in good hands.
By Imma Sila