As your business grows, you will have more and more things to manage. Running your employee payroll might make sense at the beginning of your business, but eventually, it’s something you should outsource. In this episode of MissionBusinessPodcast.com, Bernard Roesch explains why you should outsource your payroll and how the process of outsourcing payroll works.
If you have any questions about this podcast episode, please feel free to contact us.
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Why Outsource Your Payroll
Running payroll is complicated and small mistakes can be costly. It’s complicated because it involves multiple government processes and different agencies. The reporting requirements are very specific but not simple.
- If you make small reporting mistakes, they can lead to fines that can add up over time. It’s far more efficient to outsource your payroll.
- When you are running payroll yourself, the process is not going to be efficient. You are not a payroll company that does this for a living, so your process will not be as streamlined as it should be.
- The true cost of running payroll yourself should include the time it takes you to run payroll and also the penalties that you must pay for mistakes you’ve made.
- An outsource company is going to be far more efficient running payroll since they do this for companies full time. They will have a very streamlined and automated process and can usually take responsibility for any penalties that may happen.
When you factor in the cost of your time and penalties versus the cost of outsourcing payroll, it’s always more cost-effective to outsource it.
How to Outsource Payroll
There are a few steps to be aware of when outsourcing payroll.
Understand your needs – Different companies run payroll differently. If you pay your employees via check versus direct deposit, this is a different payroll process. Also you need to consider how you will get the data back to your bookkeeping system. Different vendors offer different levels of support for different payroll situations.
Choose a payroll vendor – When evaluating payroll vendors, find a vendor that already has processes for your payroll needs. Also, don’t choose vendors solely based on cost. Focus on your needs and how established the payroll provider is. You want to make sure your payroll is handled in a secure and effective way.
Transitioning to an outsourced payroll provider – You can transition at any point during a year, but it’s easiest to do on a calendar year. Payroll reporting to the government is done on a calendar year basis, so waiting to transfer until the calendar year may be best. If you need to make a transition during the year, you can do this quarterly or at month end, but the transition process will be slightly customized with the payroll provider.
Need Help Outsourcing Payroll
If you’re currently running your own payroll and want to outsource it, contact Bernard today. He can talk you through the process and make sure that your payroll is managed accurately and efficiently
You can also visit MissionBusinessPodcast.com for more insights that Bernard has been sharing with us in the previous episodes.
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