Nov 2, 2018
Running a small business can be hectic. There are plenty of tasks for a business owner to oversee when handling the managing of daily operations. Inspecting staffing requirements, attendance, business reviews and more, can fill its plate on a daily or weekly basis. Completing payroll is another task that must be done once or sometimes twice a month, depending on the pay periods.
These need to be completed on the specified date without delays and must be completely accurate. Even the slightest mistake may cast doubt on the business and employees will quickly become demoralized – starting a chain reaction that threatens to derail the entire operation.
It is quite common for disgruntled employees to seek help from government labor enforcement agencies; seeking retribution for what they see as unfair and unsound business practices being employed.
Many small business owners complete manual processing of payroll to lower overhead costs of operation. While this seems like a good idea on paper, it really isn't. Thinking big means to prepare for an eventuality of growth and processing payroll for each and every employee individually doesn’t say much for that business owner’s vision of the future.
Manually completing payroll is time-consuming and more than likely to result in a few errors along the way, especially when a business owner is dealing with a staff of 50-plus heads.
However accidental they are, if these discrepancies become frequent, the owner will most likely be certain to face angry employees, or worse, angry tax authorities. Making a small investment now is better than incurring casualties.
It is the employer’s responsibility to calculate tax and there are federal, state, and local payroll taxes that need to be applied per payroll per person.
According to the National Small Business Association (NSBA), 1 out of every 3 small businesses spends an average of 80 hours each year filing taxes, including the ones on a payroll. 80 hours that could have been spent elsewhere; perhaps, focused towards other useful initiatives that would actually help the business grow.
Checking an employee’s worked hours and multiplying it by their rate of pay isn’t the hard part of doing payroll manually. That’s just the tip of the iceberg. Putting all mention of taxes aside, a small business owner will also need to account for overtime work hours, vacation leaves, bonuses or compensation, health and medical benefits, and possibly much more.
The average amount of time that it takes to complete manual payroll processing for a single employee (and this is not even taking into account the aforementioned overtime work hours, etc.) is about 11 minutes.
Multiply that by the total amount of heads that are currently employed, and bingo, someone’s missing the bus ride home.
The solution is to invest and apply for a payroll service. The primary advantages of a small business owner using a payroll service are numerous hours saved and no liability for errors. If mistakes occur, it now becomes the payroll service’s responsibility to correct and take ownership of the problem. Besides that, there are many other benefits to reap.
Depending on which type of service is being used, the enrollment fee may either be one-time or a monthly subscription fee. Additional features that payroll services offer typically come with an additional fee on top of the upfront cost.
A smart business owner will analyze the needs of his/her business and choose a payroll service that fits right in the groove. Are only the basic functions required, or are additional services needed?
Many payroll service providers offer cloud-based platforms which means that payroll can be accessed and run remotely from any location within minutes. No need to install software or invest in hardware and servers.
Upgrades to the platform are done automatically. Payroll service providers make use of the best security encryption methods to ensure that employees’ sensitive information is safe.
A good payroll service provider will also provide round-the-clock support for its clients; to assist in case any technology-related issues arise.
One viable option for a hesitant business owner is a free trial run. Some payroll services will allow clients to use the platform for a limited amount of time at no cost just to get a feel of the system and grease up the gears. If there’s anything unsatisfactory about the platform, just cancel the subscription; no harm done.
Integrations are an add-on feature that will definitely cost something extra but which are a worthwhile investment for businesses that utilize accounting, timekeeping, and scheduling applications. Integrations will allow the payroll service to blend in nicely with all of the current software being used by the business, making it a breeze to cross-reference worked hours and calculate pay rates.
Automation and mobile access are another few nice extra pieces of tech thrown into a payroll service provider’s arsenal of features. If a payroll pay period is the same day every month, the system can be configured to run at a preordained date and time. Just hit a few buttons, provide approval, and that business owner is off to catch happy hour.
Being able to configure these functions via their tablet, laptop or smartphone only makes it THAT much easier. Gone are the days of keeping stacks of dusty ledgers filled with names and numbers from months and years past.
Another great feature that business owners can take advantage of is the powerful reporting options included by most payroll service providers. The payroll data can be spliced, pivoted, graphed, and PowerPoint-presented in a way that manual processing of payroll would never have even dreamed of.
Like with any other IT system, payroll platforms can have weak points. Some of the more notable areas of opportunity for these providers are in relation to data and cybersecurity.
It’s important to note that although most providers use top-of-the-line security systems to run a tight ship, this fact should not be taken for granted and a business owner has every right to ask questions about the security standards being employed.
Data loss is a rare occurrence but one which nonetheless can have serious implications if the information cannot be retrieved. This usually happens during a server malfunction or crash. Most reputable payroll service providers have backup systems in place to work as a failsafe but it doesn’t hurt to do some research in advance.
In summary, there is a small element of risk involved (as there is with any investment) but the advantages far outweigh the disadvantages. Payroll service is simply an evolutionary step that a small business needs to take if it intends on transitioning to the big leagues.
About The Author:
Sheena Justine Baxter has been working as a content writer and editor for 5 years. She has written different articles but focuses more on industry-related subjects. Prior to her online career, she used to work for a manufacturing company as an HR personnel, meeting and evaluating applicants on a daily basis.
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