- 1. Introduction
- 2. Determining if Outsourcing is For You?
- 3. What Next If You Have Decided to Outsource?
- 4. The No. of Clients that The Service Has
- 5. What services do you offer?
- 6. What would you say is your error rate?
- 7. Are there open channels of communication?
- 8. What accounting software do you use?
- 9. Signing the Contract
- 10. Conclusion
Small business owners find that managing payroll is a costly undertaking. When you choose to run payroll in-house, you will need the right software program, a staff with enough time to dedicate each week to the process, and a thorough grasp of employee obligations and tax laws.
This is not likely to be possible for a company that’s just starting. However, with time and as your enterprise grows, brings on more employees, and opens other branches, you find that managing payroll becomes even more difficult.
If you have started feeling the heat of managing your payroll internally, it could be better to outsource the process. And although you may be a bit jittery about handing this important function to a third party like brinepayroll.ch, it is always a beneficial move for your business. In this article, we share with you tips on how to ease the transition.
Determining if Outsourcing is For You?
Running a cost-benefit analysis will help you to know whether outsourcing is good for you or not. HR professionals single out payroll as the most time-consuming function each week. It consumes 11 hours each week on average. This translates to 14 weeks each year spent just on payroll alone.
Other than the time and money invested into payroll every week, there are also less tangible costs to deal with. The person in charge of handling payroll must be updated on the constantly changing tax codes. Your company may be slapped with costly fees and fines in case of errors when remitting tax payments.
Compare these costs against what you would pay were you to hire an external provider. Payroll companies normally charge a base fee monthly, plus another fee per check run or employee. Remember that additional services like federal and state tax filings, direct deposits, and 1099 and W2 processing usually add to the fees.
What Next If You Have Decided to Outsource?
Your cost/benefit analysis may reveal that outsourcing is the cheaper option for you. In that case, the next course of action is to begin researching payroll service providers. After narrowing down to some companies arrange meetings or set up calls to discuss the kinds of services they offer. Below, we look at some of the most important factors to keep at the back of your mind before hiring a payroll service company.
The No. of Clients that The Service Has
The person you want to entrust with handling your payroll should be reliable and experienced. A reputable company like brinepayroll.ch has several hundred clients in its locker. Apart from that, the company should assure you that they will be your partner for the long haul. You cannot be sure that a company that was only started recently will be in business in the next 5 years. What will you do if they close?
If this payroll company is brand new, how do you know they’ll be around in 5 years? And if they shutter, will you be left holding the bag?
What services do you offer?
It’s instructive to note that payroll companies differ a great deal. It could be that you only want basic services like preparing W2 forms and issuing checks. Others, however, may have more complicated needs. One criterion of choosing a particular payroll service and not the other is on the basis of the ability to offer all the services you want.
What would you say is your error rate?
Payroll errors tend to be incredibly costly. They don’t just cause a lot of stress when they occur on a staff’s checks, but mistakes in tax calculations can land you in hot soup with Internal Revenue Service. It is a nightmare for every business owner. Does the payroll provider in question boast an excellent track record of checking and ensuring that everything is up to scratch?
Are there open channels of communication?
The ability to reach a payroll company any time you need them cannot be gainsaid. You will always need to discuss things with your payroll services provider first before doing them, which is why they must always be accessible. These include opening new branches in places with dissimilar tax codes, rolling out employee benefits, and changes in staffing. There must be a direct communication line with the company managing your account.
What accounting software do you use?
You may not like it, but you will be required to furnish your payroll services provider with sensitive data regularly. That means that the software platform they use should be able to guarantee the safety of that information. Does it allow your staff to access their tax documents, benefit information, and paystubs online? Brinepayroll.ch has a comprehensive software platform that enables employees to easily access their benefits and personal finances.
Signing the Contract
After following the above steps, you will identify the company that’s most suitable for your needs. The next logical thing for you to do is sign a contract and begin outsourcing payroll. Before you sign the contract, make sure you are aware of the long-term fees of the services. Do not be swayed by the initial discount that some companies offer. The most important thing is to be comfortable with the overall costs you will need to pay in the future. Remember also that, if you intend to add more employees and widen benefits in future, it will usually mean a bigger monthly cost. Make sure you are prepared for that.
You should not just abandon all the things to do with payroll processing to the third-party company after outsourcing to them. Make sure you follow them for the first few weeks to ensure that they identify any errors and fix them quickly. Occasional challenges down the road are to be expected, but overall, your employees must get their proper salary and benefits, and also ensure that you meet all your tax obligations.
For your business to run smoothly, it is critical that you get the payroll right. If you feel that this task is too much for you, there is no shame in entrusting it with proven professionals. You only need to ensure that you do your homework well and get a top-notch company like brinepayroll.ch that meets your budget and needs.