When it comes to running a small business, there’s a balancing act between saving time and conserving funds which needs to be mastered. Taking on too many tasks will keep you from focusing on your most important investment—that is, your business. But outsource too many responsibilities, and you may find yourself losing money you’d intended to save for other purposes. As such, it is important to focus on the tasks you truly need help with—areas where your business may suffer without an expert at the helm. For example, payroll.
Skilled payroll service providers handle tasks including tax filing, compliance with laws and regulations, paid time off (PTO) and sick leave tracking, and, of course, calculating and distributing wages. But with so many payroll service options available—including dedicated payroll service providers, payroll software, bookkeepers and accountants—finding the best fit for your business can be tricky. That is where a finance-focused company like Estess CPA comes in. With services including tax planning, payroll and financial statement preparation, we can handle the monetary side of your business while you get to work building it into the best version of itself.
What are Payroll Service Providers?
Payroll service providers are third-party companies that businesses partner with in order to outsource payroll management and related tasks. This service is particularly useful for small- and medium-sized businesses, wherein the company is large enough for payroll to take up a significant chunk of time but still too small to have a designated payroll department. While the duties a payroll service provider can take on will depend on their expertise and available services, some of the tasks you may be able to outsource include:
- Gathering employee information. This allows payroll providers to calculate pay and deductions. Collected information may include:
- Time worked
- Hourly salary or work rates
- Employment status
- Overtime or bonuses owed
- Tax information
- Applicable deductions, such as retirement accounts, health insurance, tax withholdings and social security
- Sending accurate and on-time paychecks or direct deposits to employees
- Tracking and reporting payroll details, including amounts paid and withheld
- Payroll tax filing, as well as ensuring compliance with applicable tax and wage laws
- Keeping track of employee attendance, as well as how much PTO and sick leave they have taken or have yet to take advantage of
- Reporting new hires to the state
- Assisting in the preparation of tax forms such as W-2s and 1099s
Payroll Services vs Payroll Software
When it comes to payroll management for small businesses, payroll services may have a strong contender in payroll software. While payroll services are outsourced to one or more people at a third-party company, payroll software is handled in-house, either through company computers or in the cloud. It is often less expensive than third party payroll services, and may allow companies to eliminate human error and more easily access payroll data. Common features of payroll software include:
- Automatic calculation of employee wages, benefits and deductions
- Assisting in the tracking and approval of employee time cards
- Processing direct deposits
- Collecting payroll data in order to create and maintain records
- Assisting in the filing of payroll taxes
- Self-service systems; that is, a portal in which employees can see payroll statements, update their information and more
- Increased data security
- Tax compliance features
While payroll software automates many of the tasks associated with payroll, it can’t work alone. Employees will still need to manage tasks such as data entry, and it can take time to familiarize yourself with the software in order to ensure it is working properly. Additionally, payroll providers—particularly financial professionals such as accountants and bookkeepers—are often able to offer a wider range of services.
How to Choose the Right Payroll Service Provider for Your Business
If you choose to work with a payroll service provider, you’ll need to take some time in order to find a company that feels right. And knowing that you’ll be handing over a good portion of financial control and information to your payroll provider only makes it all the more important to make a good choice the first time around. When looking at prospective payroll providers, consider factors including:
- Your goals. Determine whether you are just looking for payroll services, or if you need assistance with adjacent tasks.
- Experience. How long has this company worked in payroll? While new companies may charge less, they are unlikely to have the reputations and skills of more experienced organizations.
- Prompt communication. If it takes days to hear back from a prospective payroll service provider, you may want to look elsewhere. Quick and dependable communication is especially important when it comes to financial management.
- Cost. This may depend on factors including how many employees you have and how often payments are distributed. The smaller your company and the longer you wait between employee payments, the more affordable payroll services may be.
- Reviews and referrals. If you can, ask around to see what payment providers other small business owners trust. Also take the time to look online for reviews when you find a prospective payroll provider.
- Tax and wage compliance. If a payroll provider doesn’t stay up-to-date on tax and wage laws, it may affect the accuracy of your payroll tax filings.
- Security. Make sure that the payroll provider you work with has tools such as data encryption in place to protect employee and business information.
Let Go of Your Financial Stress with Estess CPA
When it comes to running a small business, outsourcing payroll management is about more than just freeing up time for yourself and your team. It also ensures that employee payments are accurate, on-time and properly recorded. Without these services, both employee morale and your company’s payroll tax filings may suffer.
It may seem difficult to choose a reliable and cost-effective payroll service provider for your company, but if you’re a business owner in New Orleans, it doesn’t have to be. Estess CPA has been providing financial services to small- and medium-sized businesses for over 20 years, boosting company success and reducing monetary stressors. With personalized services including bookkeeping service, accounting service , and QuickBooks training, it is our goal to provide the financial tools you need to grow your business. So if you’re ready to outsource payroll management and return your focus to your company, Click Here a call or send us a message today.
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