Top 7 Benefits of Outsourcing Your Small Business Payroll
Payroll is one of the most important parts of any business. Without payroll, you wouldn’t be able to hire employees and compensate them for their time. You’d also be stuck facing legal penalties for tax evasion… or worse. However, as a small business, payroll can seriously hinder your ability to focus on growing your business, keeping your payroll information safe and accurate, and avoiding problems with the local, state, or federal government. That’s why outsourcing is the best option. In this article, we’ll discuss the top 7 benefits of outsourcing your small business payroll to a professional.
1. Outsourcing Saves Valuable Time
Payroll takes a lot of time to complete. You have to be thorough and make sure that you’re doing everything correctly, for all of your employees. During the growth process, you’ll likely start to add on more employees. More employees mean more time spent doing payroll. This process takes away valuable time that could be used to focus on your small business’ core activities such as marketing, growing your client base, and developing new products or services. When you outsource your small business payroll, you’ll free up all of that time. With more time, you’ll be able to improve your business’ efficiency, refine marketing strategies, and grow your revenue stream.
With more time to focus on a few core activities, you’ll find that you’re earning more profits, converting more customers, and creating a brand that people will recognize and trust.
2. It Reduces Overhead Costs
While outsourcing payroll will cost a little money, this cost is far less than the value of your time. If you don’t currently know the value of your time, make notes during your next pay period. How many hours do you spend on calculating employee hours, PTO, taxes, sick leave, any deductions that need to be made? How long does it take you to print all of the correct forms out, make sure that you and your employees sign them in the correct areas, and then handle paychecks? Does it take more time to then process any payments and generate reports? Once you’re done with all of that, don’t forget to take the time to properly prepare all of the taxes for local, state, and federal compliance and submit them on time.
It might seem like it’s worth your time at first, but if you document this process, you’ll find that it consumes more than you’d imagine. Since time is money, outsourcing ends up saving you in the long run.
3. Provides Increased Data Security
Processing payroll in-house comes with its fair share of risks. Unless you’re taking extremely strong cybersecurity measures, your payroll information is going to be vulnerable. While strong security is essential in your website, it’s a bit more complicated when it comes to processing internal sensitive information. Any employee who has access to payroll will be able to amend records and while we’d like to think that our employees won’t do anything of the sorts for personal gain, it happens.
Additionally, while you might spend the money to host on a secure server or network, there’s always a risk. Payroll needs to be closely supervised on open networks that are being used by an entire staff, which can cause an elevated amount of stress and lead to wasted time and energy. By outsourcing your payroll needs, you’ll avoid any potential threat of payroll fraud and will be able to trust the process knowing that your confidential data is well taken care of.
4. Ensures Complete Government Compliance
Taxes change all the time. If you handle your own payroll, you are responsible to adhere to every single government tax regulation without notice of anything changing. In certain situations, this can become a full-time job, which means that you won’t be able to focus on working on your actual business. If a new tax regulation occurs and you miss it, you’re still legally responsible with the corresponding agencies. This can cause huge problems and end up costing thousands of dollars.
Even one small mistake with government compliance can put you at risk for being audited or fined. If you do get audited, the process is a nightmare—even if you have nothing to hide other than a mistake. If you’re trying to focus on growing your small business, it’s nearly impossible to stay on top of all of the changing government tax laws. When you outsource your payroll, you’ll have access to a team of experts who focus on government tax laws for a living, so you can rest assured that you won’t face any penalties or fines from an oblivious mistake.
5. Outsourcing Reduces Risk
If you’ve never done payroll before, you’re probably wondering how hard it really is. There are tons of programs available that advertise ease of use, but at the same time, there’s a lot more to the process to ensure accuracy and compliance. Payroll needs to run correctly and be on time with every single deadline to avoid any penalties or fines. If you’re late to pay your employees, they’ll start to get frustrated and lose trust in the business. Eventually, they can make formal complaints that could result in penalties for small businesses. If you’re late paying the government, be ready to face hefty fines.
6. It Eliminates Complications
If problems arise when you’re doing payroll, you need to take the time to fix them. This can create complicated daily schedules that take away from your productivity. As your business grows, these complications will too. By outsourcing your payroll, you’ll make your life easier and ensure that all of your employees are happy and getting paid exactly what they were promised.
7. Outsourcing Gives You Access to Expertise
As we mentioned, outsourcing your payroll needs gives you unparalleled access to expertise that you’d otherwise not have. With over 10,000 different tax laws being imposed on small and large businesses every year, this means you don’t have to spend hours of time researching and becoming a tax expert. Certified tax couches and accountants specialize in these things and have certain types of technology to make sure that they’re doing everything exactly as they should. By having the proper access to expertise and the technology that they have, you’ll be able to provide your employees with options that will make their lives as easy as possible. When you outsource your payroll, you’ll be able to offer both direct deposit and traditional employee checks alongside easy to use PTO requests, sick leave tracking, and more.
At Del Real Tax Group, we’re committed to helping small businesses maximize profits in any way we can. That’s why we offer complete payroll services that can be personalized to your specific needs. We’re committed to working with small businesses and we’ve developed a very specialized niche that allows us to fully concentrate on each one of our clients. Our primary goal is to help you save thousands of dollars in taxes a year!
If you’re interested in learning more about how outsourcing your small business payroll can help your company, give us a call at 708-788-0082 or contact us for a free consultation.
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