Written by Jim Hutsinpiller | Employer Services Advisor | PayNorthwest
Regardless of the industry, your firm will need a payroll provider. When making a decision, keep in mind that there are a variety of benefits to picking an outside, independent provider:
Running a small to medium sized enterprise is all about resource allocation. Business owners are best off focusing on their mission rather than doing payroll or worrying about finding, retaining and managing an employee to do their payroll. Payroll is a critical piece when you have employees. They expect to be paid correctly and on time but it’s all about working ON your business rather than IN your business. It is typically less expensive to hire a payroll service than hiring an employee capable of accurately and reliably doing full cycle payroll tasks, including ACH transfers and EFTPS payments, themselves.
Payroll is complicated even if you are just located in one state. If you are in a multi-state or multi-tax environment it gets even worse. Not paying taxes correctly and timely leads to penalties and an increasing likelihood of audits. By using an outside partner to be responsible for timely tax filings, you outsource that risk. Also, you have some built-in redundancy when you use an outsourced payroll service. Even if the person in your organization is sick or has a tragic accident, you can still get payroll done timely and correctly with your service bureau’s help.
3) Employee Benefit and Convenience
Make no mistake, the Millenials are here! They expect direct deposit and they expect the ability to access information and take actions whenever they want wherever they are. This can include not just viewing their pay stub and direct deposit information but seeing time-off balances, requesting time off, getting benefits information when they need it, and checking work schedules.
Payroll companies are also already knowledgeable in how to handle benefit plans. Do you know the difference between Section 105 and 125 Plans? Do you know which states impose a tax on employer contributions to 401(k) Plans and which ones don’t? The right payroll partner does!
4) Management Tools
Just as getting information into an employee’s hands is the new standard, getting information into management’s hands is the new elevator to a higher performance level. On-the-go access through laptop and smartphone for historical data, time and attendance information, performance evaluations, and earning history enable faster decision-making for teams.
Access to custom-designed cost reports and job costing promotes a more thorough analysis and lessens “seat of the pants” planning. The old days of HR or Accounting as a central repository of information are gone! By putting the right information in the hands of the right people when they need it, your organization becomes more agile and productive.
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