Payroll processing services are third-party companies that you can outsource your entire payroll process to. These are companies that often employ experts in payroll processing, tax preparation, HR, payroll legal services, and many other areas of information that are not easily accessed by employing an in-house team.
In this guide to getting your payroll properly run, we’ll cover:
- What do payroll services do?
- What types of payroll services are offered?
- Does a CPA do payroll?
- How do payroll companies operate?
- How do payroll companies make money?
- Why do I need a payroll service?
We know it can be daunting to try and upgrade your payroll service while running a small business. Our hope is that this information will let you make a stress-free decision that streamlines your company.
What do Payroll Services do?
Though there are no one-size-fits-all payroll service plans for small businesses, a typical outsourced company provides:
- Onboarding and employee financial data intake
- Pay period data aggregation
- Processing payroll and filing all taxes
- Disbursement of checks and pay stubs
- Data security and long-term storage
- Quarterly and yearly payroll tax filing
- Tax planning and assistance
When you are searching for a payroll company near you, make sure to discuss your specific company needs and how their services might fit your budget.
What Types of Payroll Services are Offered?
If you are looking to move from manual payroll to payroll processing service, you have a number of more efficient options. These can include:
1. DIY Payroll Software: There are dozens of viable programs that can connect with your bank accounts, compile your employee data, and produce paychecks and pay stubs on a regular basis. For businesses with a few employees or not very many pay rates and locations, this can be viable early on. However, as your business scales, running in-house payroll with software can become time-consuming and leave you prone to making mistakes.
2. Bookkeepers: You can hire an outsourced bookkeeper or part-time staff member in order to keep your finances clean and run your payroll. In many of these instances, your payroll will not be their sole focus, and even an in-house bookkeeper is likely to demand more hours than running a bi-weekly payroll. However, for the right size small business, a bookkeeper running payroll can be a reasonable solution.
3. Big Box Payroll Providers: Companies like ADP, Quickbooks Online, and Paychex provide enterprise-level payroll solutions for growing businesses. While these providers are good for businesses that have reached a large number of employees due to their diverse suite of products, it can be difficult for smaller businesses to get the proper customer service they might need.
4. Outsourced Payroll Specialists: Small business payroll specialists are some of the best ways to bring big financial performance to a rapidly-growing organization. Once your business gets past a few employees and your products and services are starting to take off, you want your focus to be on developing those. The time and energy spent on payroll and the tax follow-up can be outsourced to experts whose jobs are to deal with these issues all day every day. Even better, the level of personalized customer service will allow you to create a sleek payroll system that fits your business’s unique needs.
There are many different payroll services that can get the job done for your business. Our recommendation is to see which option can save you the most time, stress, and money. For most small businesses, we believe this is going to be with an outsourced payroll provider. It is still important to determine how a payroll specialist best fits your company’s needs though, so be sure to vet all your options thoroughly.
Does a CPA Do Payroll?
This is a commonly asked question, and the answer is technically yes, but realistically no. There are some CPAs who will do payroll services, but even then, most outsource their work to bookkeepers or third-party services. We do not recommend trying to use a CPA for payroll work specifically.
How do Payroll Companies Operate?
Though each payroll service is different, most payroll companies provide value by having experts in each area necessary to run an optimized payroll for any sized business. This includes specialists in data security, HR, tax law, and payroll management.
When it comes time to choose which payroll service you are using, make sure to ask them about their process and who will be involved in handling your account. This can be a great way to preview the customer service you will receive and see the value that the payroll company will provide your business.
How do Payroll Companies Make Money?
When it comes down to it, a payroll company makes money like any other business. Their products and services are all pain points for small businesses, and they focus their time and energy on becoming efficient experts in all the related fields. This means they can charge a price that makes them profit while also delivering a product that will save their clients time, money, and stress. Win/win!
Why do I Need a Payroll Service?
Your business needs a payroll service because it can be one of the most dynamic ways to take your business to the next level. Payroll can be a major headache when it’s done in-house; employees get grumpy when there are errors, their paychecks are late or incorrect, or the format is inconsistent. There are also complicated legal and tax implications for getting payroll wrong.
Conversely, when you use an outsourced payroll provider, they can offer:
- Consistent and accurate paychecks and pay stubs.
- The best payroll software and technology
- Legal and tax season assistance
- HR and onboarding
- Quick solutions for payroll and tax errors
Most importantly, payroll providers are working all day every day on payroll – and your in-house team most likely is not. You should trust experts with such an important part of your financial ecosystem, and in turn, they will save you time and money.
Paytech is Arizona’s Leading Payroll Provider
At Paytech, we work to empower small businesses by providing custom payroll solutions to fit your employees’ needs. We understand how difficult and stressful it can be to run manual payroll or to navigate software without proper support. Our team of experts will be there to answer your questions every step of the way as we build a dynamic and streamlined payroll solution for your business.
If you’re ready to turn payroll into a positive instead of a stressor, please reach out today. One conversation could help take your business to the next level in no time.