Owning a small business is like walking a tight rope holding a cash register in one hand and a profits and losses ledger in the next. You’re constantly attempting to manage your multiple roles while remaining steady on a thin, tightly-stretched chunk of nylon. As a small business guru, you might be looking for any way to lighten the load, without putting a tremendous strain on your limited resources. This is where outsourcing your payroll services comes into play, and before you assume this expense isn’t necessary for your handful of employees, there are several benefits to this service. Here are a handful of reasons why turning to a professional payroll services provider is a wise investment.
Save Some Precious Time
Many companies hire an in-house payroll specialist or book keeper, while other intrepid owners take on this Herculean task themselves. If you’re a hands-on owner that has been keeping the books in order for years, imagine all of the family picnics, trips to the beach or snow fights you’ve missed in the name of tracking your costs and doing payroll. When you hire an outside company to handle your payroll, it frees up time to actually enjoy your life and interact with customers.
The Tax Man Cometh
Tax laws are constantly evolving, and without outside help or a degree in finance, it can be impossible for a small business owner to keep up. It’s estimated that the average business owner pays the IRS $845 in penalties simply because they aren’t aware of the latest tax laws concerning payroll. A reputable payroll services company provides a tax guarantee, which gives a peace of mind that greatly outweighs any added expense.
Reduce Your Long-Term Costs
The initial cost of hiring an outside payroll services company, including consultations and software improvements, is going to cost you a fair amount. Overtime, however, the money you’ll save on potential tax penalties, hiring an in-house bookkeeper or throwing your hands in the air to have your books balanced by a tax professional is well worth the start-up.
Keeping up with Technology
Last year, you installed the latest, user friendly payroll software available at your local big box department store. It set you back a pretty penny, but when you were able to keep accurate payroll records, including tax liabilities, it was well worth the added expense. Fast forward one year, and after recent tax changes, your expensive, out of date payroll software can potentially cost you hundreds or thousands of dollars in IRS penalties. The majority of payroll service companies implement the most up to date software, meaning you won’t be in trouble once tax time inevitably rolls around.
Employees Come and Go…
You’ve employed the same bookkeeper for years who knows your payroll system in and out. Unfortunately, he just handed you his two weeks’ notice. As you scramble to find his replacement, you realize his “system” is complicated and, realistically, it would take weeks for a new bookkeeper to get up to speed. A payroll service company isn’t your employee, and won’t walk into the office, throw down his ledger and move to Barbados on a whim.
Track Your Payroll Costs
With everything going on in your small business, it can difficult to keep track of every facet of the operation. Eliminate one major headache by outsourcing your payroll needs. You’ll know exactly—to the dollar—how much is spent keeping payroll straight each month, instead of discovering how much you overpaid at the end of the year.
A Brighter Future
You’ve spent 80 hours a week, plus weekends, growing your small business since day 1. The fruits of your labor are finally beginning to ripen, meaning you can expand and take on more employees. This is an exciting prospect, but also means your payroll just became a lot more complicated. Instead of hiring an additional bookkeeper and hoping for the best, put your worries to rest by outsourcing your payroll needs. As your business expands, you’ll require a team of professionals with the tools and knowledge to handle this exorbitant workload.
Outsourcing your payroll eliminates the burden many small business owners find too cumbersome to handle. If you’re still unsure about the return on your investment, ask a fellow business owner who has benefited from hiring an outside payroll services company; chances are he or she will tell you to make the change.
About the Author: Janice Harrison is a guest blogger and small business owner. For the first two years of owning her company, Janice completed payroll herself; however, as the business grew in size, she found it logical to outsource the task to professionals and advises all business owners to consider doing so.