If you have employees, then making sure you pay them accurately and on time is very important. Unfortunately, the process is not as straightforward as you might think. If you’re the owner of a small or medium-sized business, you might struggle to handle payroll. 

Setting up payroll correctly is integral, as it allows you to make the right payment to your employees and keep detailed records of all payroll activities. However, the process can take a lot of time and energy and end up giving you a headache. Besides, you probably have a lot of other things to take care of. 

When it comes to processing the payroll, you will have to enter your employer identification number, collect employee tax information, select a payroll schedule, calculate gross pay, determine deductions for each employee, and calculate the net pay. If it all seems like too much, here are some of the ways that you can make managing payroll a lot less stressful and more hands-off.

Use an Automated Option

One of the best ways to simplify the payroll process is by using an automated service such as QuickBooks Payroll, Paychex, Gusto, or OnPay. Since paying your staff on time helps you avoid poor performance, low morale, and loss of trust, it’s important you get a good payroll system to handle everything for you. Gone are the days when businesses relied on manual processing. Today, payroll software allows you to handle the following:

• Carry out year-end reporting.
• Reduce the burden for compliance and prepare payroll taxes
• Work out all payroll deductions.
• Fill out tax forms and submit them for each employee.
• Determine holiday pay, deductions, retirement contributions, employee benefits, the hourly rate of each employee, expenses, and bonuses for each period automatically.
• Generate accurate salary payroll slips that include the payroll tax rate and other information about your employees. 

Payroll services allow you to save time. Business owners who have a tight schedule and struggle with making payments, direct deposits, planning, and providing paychecks to hourly workers will find it to be a great option. In fact, it is possible to link your payroll to the timesheet system for recording the time worked by employees. It would transfer all the information automatically to ensure that all calculations are done with minimal effort.

Besides, payroll software stores all your personnel records and assists with future costs. However, there are disadvantages of payroll software programs that you should consider. These include information access, fraud, cyber security, theft, and data security issues.

Get an In-House Bookkeeper

Another option that you can take advantage of for handling your payroll is to hire an in-house bookkeeper. As your business grows, you shouldn’t have to worry about payroll. Instead, you should let someone else take on the work. You need to make sure that you hire someone who has considerable experience in bookkeeping and can easily take over your payroll with minimal guidance.

It is always great to know that there is someone who can manage all your finances for you. In fact, it’s necessary, especially if you don’t have a finance background. As your bookkeeper will come to work every day, you’ll always have someone to manage your payroll. The support provided by your in-house bookkeeper will allow you to focus on running your business.

Moreover, you can even ask them for advice, as they will have an in-depth understanding of the payroll process. However, it can be quite costly to employ an in-house bookkeeper. You would have to pay a salary, employee benefits, and spend money on equipment and an office. Because of this, it might be best to outsource the work to an independent contractor.

Contract with a Bookkeeping Service Provider

Many businesses today rely on independent contractors for managing their accounts instead of recruiting an in-house bookkeeper. It’s a much more efficient option. Although you might think that seeking a bookkeeping service is expensive, it usually costs a lot less than hiring someone full-time.

Your service provider has the experience, technology, infrastructure, training, and manpower to keep your books and your payroll in order and humming right along. You’ll also be able to scale the service as your needs grow, instead of hiring additional people to manage a greater workload. Your bookkeeping service provider will provide a wide range of services, such as payroll management, bookkeeping, legal advice, tax preparation, and much more.

What Can a Payroll Provider Do?

A payroll service provider handles more than just basic payroll calculations. Let’s take a look at some of the support options they provide. 

Payroll Processing

They will calculate hours worked by all employees,  individual salaries and all deductions, so that you can issue a check, and ensure that everyone is paid on time.

Wage Garnishment and Tax Withholding

Another service that you can benefit from when you outsource your bookkeeping to an independent contractor is that they will ensure that garnishments, payroll deductions, and appropriate taxes are accurately withheld and paid from employee wages.

Tax Filing Services

Your payroll provider will file all local, state, and federal taxes for you and even assist with reporting and preparing forms such as 1099-NEC, W-2, and so on.

Compliance Expertise

As your payroll provider will keep up with the latest regulatory requirements, you’ll be able to remain compliant with all government requirements. You won’t need to worry quite as much about keeping up to date with wage and tax laws as they will ensure real-time compliance.

Support

If you require additional support, your payroll provider will be more than happy to help you. You’ll have access to qualified and caring specialists who can answer questions, troubleshoot software, fix errors, and counsel you on certain decisions related to your business’s finances. 

Benefits of Outsourcing Payroll

If filling out forms, performing calculations, worrying about compliance and issuing payments is something you don’t want or don’t feel equipped to handle, you can rely on your payroll service provider to take care of the payroll process for you. Here are some of the benefits of outsourcing your payroll.

1. Saves Time

A great benefit of outsourcing payroll is that it helps increase company efficiency. Rather than having to spend a lot of time processing payroll, the independent contractor will handle all the work for you so that you can focus on your core responsibilities. 

2. Reduces Costs

Since they’ll be helping you avoid additional payroll hours that would have gone to an in-house employee, and the cost of equipment, they’ll help you save a lot of money. When you compare the cost of hiring an in-house bookkeeper and outsourcing payroll, you will quickly realize just how much money you can expect to save. 

3. Minimizes Compliance Risks

Staying compliant is never easy. As local, state, and federal governments continue to introduce new laws and change existing ones, there is a significant compliance risk that you need to prepare for. Often, your best option is to let someone experienced in this area handle it. 

4. Provides Access to Specialized Knowledge

When you outsource your payroll, you get to benefit from a team of professionals who have specialized knowledge of tax codes, bookkeeping matters, and financial planning. You can consult with them to find out how you and your business can sharpen each of these areas. 

5. Ensures Data Protection and Security

In order to protect your company and your customers, you need to understand just how important protecting your data is. Your payroll provider works with the latest security measures, multiple layers of protection, including state-of-the-art encryption, and more. They will remain transparent with you and employ several measures to protect your data. 

6. Eliminates Stress

Paying your employees on time can be quite stressful, especially if you lack the experience in bookkeeping or just don’t have the time. Don’t spin your wheels or give yourself anxiety worrying about accurate payroll, tax compliance, and keeping it all in order. Partner with someone who can do it all for you. 

In Closing

Managing payroll well is one of the most important things a business owner needs to do. It’s also something that many people neglect, procrastinate on, or get disorganized with. You can’t afford to not take payroll seriously. Choose a solution that takes care of all your needs and allows you to focus on leading your company. 

Sound Accounts helps business owners increase productivity and relieve stress by managing payroll and all their bookkeeping needs. Connect with us today to learn more about how we can help you.  

To learn more about managing payroll, see our frequently asked questions below. 

FAQ

Can I pay employees without an official payroll process in place and without using a payroll service or software?

Yes, you can. But it quickly gets disorganized and leaves you wide open to costly errors and conflicts with your employees. It is strongly advised that you create a detailed payroll process and get the tools and help you need to manage it. 

Can I pay cash in hand to employees?

Although employers can pay cash to employees, it is best that you make a direct deposit or issue a check to avoid errors and remain in compliance.

What is the most secure method for an employer to pay employees?

The most secure method for paying employees is a direct deposit to their bank account. This eliminates things like misplaced or lost checks and cuts down on your employees’ time spent waiting for their compensation.