Regardless of the size or purpose of a business, keeping up with the back-of-the-store duties (i.e. accounting, payroll and even HR-related tasks) takes a substantial amount of time and diligence. In most operations, these types of responsibilities have a corresponding employee. But, in some cases, one or more workers may take on these tasks in addition to their designated responsibilities.
When employees wear multiple hats at work, job-related stress is bound to increase and the business becomes vulnerable to costly errors. However, there is an answer.
The benefits to outsourcing administrative tasks have been well documented over the last several years. For example, SurePayroll recently highlighted the growing trend toward utilizing virtual assistants as a means for business owners to enhance efficiency in the administrative realm.
Hiring a virtual assistant to prepare and send a shipment of products, organize the filing system or cross-check the spreadsheets is a good use of everyone’s time. Yet, these employees-for-hire may not be the right fit for one of the most time-consuming – and easily outsourced – business responsibilities: payroll.
Payroll is its own beast. It’s an on-going process with different variables at every turn. Often it seems once the task has been conquered, regulations and technology change. Also stressful is the ever-present risk that the person who tackles the payroll process will leave the company, taking his or her payroll expertise along with their nameplate.
Thankfully, the marketplace has evolved in such a way that payroll outsourcing is a viable option for many companies, thus reducing the stress associated with the process. However, delegating the process to another is not the best fit for every operation. Knowing when to outsource payroll is an important element for business to rationalize.
According to Entrepreneur.com, factors such the number of employees at the company and the skill level of the payroll processor should be considered before outsourcing payroll. “The key to having an effective payroll system is keeping accurate data that can be retrieved at a job level within your overall accounting system that is managed by a capable individual–be that internal or external to your organization,” the site notes.
Making the Call
A small business with 10 employees will typically spend as much as $2,600 per year in direct labor costs associated with payroll. With that in mind, the direct costs of processing payroll can be greatly reduced by outsourcing the task.
The decision to let go of the reins and outsource payroll has benefits beyond time and money savings; it can stave off a visit from Uncle Sam as well. Withholdings are a delicate matter when it comes to payroll processing. There are various state and federal withholdings that are mandated by the government, as well as optional withholdings for insurance and dues.
As noted by SurePayroll, using the wrong tax tables can result in stiff penalties. Outsourcing payroll removes the risk factors associated with taxable income and witholdings and keeps payroll running smoothly, allowing for more time to dedicate to growing the business.
Sources (and related articles):
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