Accounting and payroll services can be some of the most time-intensive and stressful tasks for any organization. Between time management, proper accounting, and the legal knowledge required to categorize and file payroll documents correctly, the process can be tricky.
Additionally, most small businesses do not have the resources to sustain a full-time in-house accountant. As a result, it is estimated that these organizations spend up to 5 hours per pay period entering and filing payroll, only to have 40 percent of these businesses see consistent errors.
This is why outsourcing your small business payroll and its associated accounting makes complete sense. Your organization can reduce time spent, financial burdens, and overall stress by letting an experienced and skilled third-party provider handle all elements of payroll processing.
Top 5 Benefits of Outsourced Payroll
1. Save Time
Those 5 hours we referenced often come from a CFO, another executive, or a manager. The reality is that all of these roles would be better suited to focus on your business’s overall product.Even if the CFO deals with related topics, data entry for payroll, and the subsequent headache of correcting errors and dealing with the HR component make it an inefficient proposition.
Ultimately, outsourcing your payroll makes sure that each stage of payroll will be resolved by someone with specific expertise in that field. In turn, your people can focus on the jobs you hired them for, making your business more efficient.
2. Reduce Risk
Dealing with people’s wages, salaries, and tax filings is a serious issue. It is estimated that nearly one-third of all employers make payroll errors, and the average small business incurs $845 each year in IRS penalties related to payroll.
Because a third-party payroll processor will have a legal team specifically devoted to payroll items, they are far less likely to commit these types of errors. Similarly, they act as a legal buffer between your business and many forms of liability- this is an important area to address when looking for qualified vendors to handle your payroll.
3. Better Prepared for Tax Season
If your business is still running a manual or internal payroll process, chances are you are getting annoyed with having to send taxes semi-monthly, and file your quarterly reports.
Additionally, as you are working towards your income tax season, payroll filings often play a significant role in your profitability. If you are not avoiding certain payroll tax pitfalls and getting the most out of potential deductions, you are doing a disservice to your balance sheet. With a professional accounting team attached to a full-suite payroll service, the transition is smooth, and there will be no miscommunication about data.
4. Automated Pay Checks, Pay Stubs, and Filings
Another element of running payroll internally is the coordination it takes to provide paychecks on time, pay stubs in an efficient manner, and file all associated tax forms on time. It is estimated that 66 percent of workers would suffer if paid late for one given check, and that is the most critical issue: making sure your employees are taken care of.
With an outsourced provider, they will have integrated plans to have physical checks mailed, digital stubs sent, and all fillings (pay period, quarterly, and annually) submitted on time, guaranteed.
5. Safe Data Stored in One Location
As the business world becomes more digitized each year, data transmission and safety are highly pertinent. Especially when dealing with sensitive information such as social security numbers, bank account numbers, and financial data, you need to be sure your company and employees are safe.
With a third-party payroll provider, they will store all data within an extremely secure server, follow the leading cybersecurity measures, and will take on the liability of housing data. Say goodbye to filing cabinets and folders on unsecure servers, and say hello to less stress and happier employees!
Accounting and Payroll Services at Paytech
When it comes to running small business payroll services, the data is clear: outsourcing your payroll and associated accounting is the way to go. It saves time, money, and reduces errors. Most of all, it relieves stress from ownership, management, and employees.
Paytech has over 30 years of experience in transitioning small business payrolls from manual or internal processes to streamlined outsourcing. Our team is dedicated to providing payroll solutions backed by a team with expertise in every area necessary for financial success.
If you are interested in starting a conversation to modernize your payroll processing, please reach out today — we’d love to help.