Feb 2, 2024
This Podcast Is Episode 561, And It's About Easing Your Back Office Burden One Payroll At A Time
As a construction business owner, you have a lot on your
plate. You need to manage your employees, oversee projects, ensure
compliance with regulations, and keep your clients happy. Amidst
all this, you may be tempted to handle your payroll to save costs
and maintain control.
At face value, it seems like a great idea. If you're a small
business owner with just a few employees, you probably think hiring
a payroll specialist is an expense you can avoid.
You feel that you can handle it yourself. You intend to keep
your staff paid right and on time. What could go wrong, right?
Well, lots, actually. And before you know it, it's now a costly
mistake, and you need to spend more money to make it right.
Why doing your own company payroll is not a great idea:
1. Time-consuming
Payroll processing is a time-consuming task that requires
attention to detail, knowledge of tax laws, and expertise in
accounting. As a construction business owner, your time is better
spent growing your business and focusing on your core
competencies.
If you don't have a finance background, you'll likely spend a
substantial amount of time calculating employees' work hours,
computing taxes and other deductions, creating payslips,
processing, and filing.
And even if you have a bit of a background in bookkeeping, are
you sure you want to spend your precious time doing these tasks
instead of focusing on the core aspects of your business?
By delegating payroll processing to a professional, you can
free up time for strategic planning, marketing, and business
development.
2. Risk of errors
Payroll processing involves complex calculations and
compliance with federal, state, and local regulations. Any payroll
mistakes can result in penalties, interest, and legal liabilities.
By outsourcing payroll to a professional, you can reduce the risk
of errors and ensure compliance with regulations.
A payroll specialist knows the ins and outs of taxes,
overtime, contributions, sales commissions, and bonuses. The bottom
line is that another professional can do it better, and while
they're at it, you can get back to doing what you do best– like
growing your business!
3. Costly mistakes
Payroll mistakes can be costly for your business. For example,
you may be subject to penalties and interest charges if you fail to
withhold the correct taxes. Similarly, if you misclassify employees
as independent contractors, you may be liable for back taxes,
penalties, and legal fees.
Sure, you can learn about relevant tax adjustments and
benefits procedures if you want to. But then again, you'd be
spending more time educating yourself, not to mention the
possibility of making costly mistakes. Payroll processing requires
expertise in accounting, tax laws, and compliance regulations. As a
contractor, you may not have the time or resources to keep up with
the latest changes in payroll regulations.
A professional construction bookkeeper can help you avoid
costly mistakes and protect your business from financial risks. You
can benefit from their expertise and ensure compliance with
regulations.
4. It's aggravating
There's no denying that payroll processing can be stressful,
especially when you don't know what you're doing. Reduce stress and
spend more time on business activities that drive profits and
growth. You can also eliminate the risk of burnout and improve your
work-life balance.
Better
Practices
Payroll is one of those things that starts simply enough. You
create your construction business, outsource contractors, or hire
part-time crew, and things tick along. It's straightforward and
sufficient to keep everything in line at first, but what happens to
most companies is that they grow!
This is a great thing, but it also means that payroll becomes
more complicated. As such an essential aspect of your business,
payroll must run smoothly. Getting paid is, after all, the primary
reason that most people come to work.
Still not quite ready to outsource? How about try this
approach:
1.
Simplify
Keep things as simple as possible wherever you can. One way to
do this is by switching to direct deposit. This will drastically
reduce the work put into issuing and tracking payments.
2.
Schedule
At least once per year, and preferably more, it's crucial that
you (or your payroll professional) take some time to create a
payroll calendar. Highlight any dates that may cause a lag in your
employees' pay.
It will also allow you to plan for any potential shortcomings
or other issues arising from holiday closures or oddities in the
calendar. Making a payroll mistake is a surefire way to lower
employee morale, so it's essential to be aware of these dates ahead
of time.
3.
Automate
The computer can be your best friend. Finding the right
software to help with payroll can automatically take care of
simplifying and scheduling, freeing up valuable time for your
payroll specialist.
It also eliminates the potential for human error in payroll
processing and creates a crystal-clear picture of your finances.
Many options are available these days that are easy to learn and
straightforward to maintain.
4. Brush
up
Payroll rules and regulations can change frequently and for
any number of reasons. It's important to stay informed on any
changes in your region and proactively plan for them.
A lot of time can go into correcting a payroll error, so know
what's happening to avoid this. With more and more employees being
hired remotely, it's also important to be aware of any regulations
on those geographically located in a different area from your
business.
5. Get
help
If hiring a full-time in-house payroll staff is impractical,
you can always come to us and let us take care of your payroll.
Whether you need weekly, fortnightly, or monthly processing, our
team is flexible enough for you.
As construction accounting specialists and payroll experts, we
can make your employees happy with timely and accurate wages,
maintain tax compliance, and significantly ease your back office
burden.
In
conclusion
Payroll is most effectively managed when it's simple,
straightforward, and coordinated. When it starts getting tough to
keep it that way, it's likely a sign that your company has grown
and you're ready for more robust support.
Outsourcing payroll to a construction accounting professional
can save time, reduce errors, avoid costly mistakes, benefit from
expertise, and reduce stress. This will allow you to focus on
growing your business and achieving your goals.
PS
We offer free resources to
help you save time and money that you can download and print
now.
About The Author:
Sharie DeHart, QPA, co-founded Business
Consulting And Accounting in Lynnwood, Washington. She is the
leading expert in managing outsourced construction bookkeeping and
accounting services companies and cash management accounting for
small construction companies across the USA. She encourages
Contractors and Construction Company Owners to stay current on
their tax obligations and offers insights on managing the remaining
cash flow to operate and grow their construction company sales and
profits so they can put more money in the bank. Call 1-800-361-1770
or sharie@fasteasyaccounting.com