Will Outsourcing Payroll Make Your Life Easier?
By Michael Alter As 2005 gets underway, you might consider
eliminating your payroll pains through outsourcing. Whether you
process payroll manually or use a service, the outsourcing options
available to small businesses are better than
ever!
 If you're like most small business owners, you
long for the good old days. Remember when you first started your
business? Everything was about growing your business. But over
time, you got bogged down with tedious, time-consuming
administrative work that prevents you from focusing on your core
business. Instead of growing your business, you're suffocating
under a pile of mind-numbing paperwork.
The worst culprit? Payroll.
Even experienced business owners find that payroll is a pain.
For starters, you've got to keep track of payroll regulations and
changes in withholding tables--a time-consuming task. Calculating
the actual payroll amounts and deductions is equally tedious. It's
very easy to make a mistake. Then there's the arduous chore of
writing checks and making all the proper quarterly and end-of-year
filings for federal, state, and local payroll taxes.
It's not uncommon for small business owners to spend between two
and eight hours processing each payroll if they do it manually.
Mistakes are costly. Employee morale dips, and employees lose faith
in management when you give an employee a check or W2 with errors.
They may forgive--but they don't forget.
The Internal Revenue Service (IRS) never forgets and is far less
forgiving than employees. File late or with an incorrect amount,
and you'll have to pay a payroll penalty. Every year, four out of
ten small businesses pay an average fine of $845 for payroll
errors. When you add it all up, that's billions of dollars in
fines. Plus, there are new fines in the works that will penalize
you if you don't keep good payroll records. California passed a law
that imposes a $750 fine on small businesses that aren't able to
quickly produce accurate payroll records upon an employee's
request. Experts believe that many other states will follow with
similar legislation.
When you consider these penalties and the value of your time,
processing payroll internally can be a very costly proposition.
Even if you've already outsourced, there may be room for
improvement. If you're tired of all the headaches associated with
payroll, it may be time to take a fresh look at outsourcing
payroll. And, if you've already outsourced payroll, it's worthwhile
to consider whether your current service is giving you everything
you want.
What's New in Payroll?
 The Internet has greatly improved the process of
outsourcing payroll. For instance, with an online payroll service,
it's possible to enter data and view it if you have access to a web
browser. Once you enter your payroll data, the service
automatically calculates, deducts, pays and files all federal,
state, and local taxes. Paychecks can be printed on your laser
printer or can be routed to your employees' bank accounts via
direct deposit. W-2s are automatically prepared at the end of the
year. The key benefit of online payroll is enhanced control.
Traditionally, payroll providers require small business owners to
call in payroll at a designated time, even if that means having to
leave an important meeting with a customer or an employee. With an
online service, payroll can be processed whenever it's
convenient.
Control also comes through the ability to modify payroll
information in real time and view your payroll calculations
instantly.
With traditional "offline" payroll providers, the small business
owners act through an intermediary--the payroll clerk--who enters
the data. When mistakes are made--which frequently happens--the
small business owner doesn't know it until the checks arrive.
 Finally, control is increased through the
availability of reports that let you track and monitor your
payroll. Employers have access to online payroll reports in real
time after logging into a secure website. Similarly, employees can
log in and access and print their payroll records, alleviating an
administrative burden that frequently arises when employees need
proof of payment history for loan applications and other
purposes.
Beyond increased control, online payroll lets small business
owners save time and money. It only takes a few minutes to process
payroll online, so time is freed up for more important things, such
as gaining a new customer or spending time with your family.
How do the new services save money? Because the new online
payroll services don't have the same cost structure as traditional
payroll services, they can charge 30 percent to 50 percent less.
Moreover, many payroll services guarantee you won't incur a payroll
penalty, which can represent a considerable savings.
Taking Control of Payroll
Outsourcing payroll frees you from wasting time, money, and
resources on a tedious task that is ancillary to your core
business. Getting started with payroll outsourcing is easy enough.
You can find the payroll service that's right for you by searching
on the web or by asking your colleagues for a recommendation. In
many cases, you can simply enroll online and get started
immediately.
The Bottom Line
Making payroll is something that small businesses have to do.
But the good news is that from a process perspective, it's getting
much easier to "make" payroll. Switching to a new payroll service
can alleviate pain and let you focus on what's most important:
growing your business with focus and attention, just like you used
to do. Michael Alter is president of SurePayroll. His company offers a web-based payroll service designed exclusively for small businesses. For more information, phone 877.954.SURE or visit www.surepayroll.com 
Table Of Contents - March 2005
|
