The American services sector is one of the largest and fastest-growing segments of the U.S. economy. It’s also one of the most complicated to navigate as a business owner. This is especially true when it comes to managing your payroll and taxes, which are two areas that impact your employees directly and require in-depth knowledge on your part as an accounting firm or business owner. If you operate as a business or work for one, chances are you have some sort of HR component in place — whether that’s just a directory at the company with contact information for all employees, online profiles with passwords for secure access or something more complex like third-party software, website integration or employee management apps. With all these moving parts, however, there are many other services you might not think of that can make life easier if they fall under your umbrella as an organization. Here are some tips on how to find, hire and outsource a payroll service so you can free up more time to focus on what matters: growing your business and keeping happy customers!
The benefits of outsourcing your payroll
A major benefit of outsourcing your payroll is that you can remove the risk of making a mistake and lowering employee trust in the process. Mistakes happen, but with an outsourced payroll services provider, you’re not investing in an employee who could make a costly mistake and be terminated. Another major benefit of outsourcing payroll services is that it can save you time. Many providers are open 24/7 and can have payroll done and sent to employees electronically in a matter of hours. This can be helpful for businesses with employees who work non-standard hours or those that operate in different time zones. Outsourcing your payroll also has benefits for your employees. If your company uses a payroll service, employees can track their hours, submit time off requests and receive their paychecks on time every single time without having to contact you as the business owner.
Consider your human resources needs
Before choosing an outsourced payroll service, consider what services your company currently offers employees. If you manage things like health care, benefits, vacation time and training, consider the costs of keeping these services in-house versus outsourcing to a payroll service. If you manage things like hiring, onboarding, employee termination and other aspects of human resources, you might want to consider outsourcing to a service that can help with these things to make it easier on your HR staff.
Find the right payroll service for your company
If you’re considering outsourcing your payroll, you may want to consider hiring a CPA firm or a company that specializes in payroll services. Some payroll companies also offer HR services, so you can use one company for everything.
Check out the candidates
Before you make a decision on which company to hire, you want to make sure all candidates are held to the same standards. Make a checklist of the requirements each company must meet to take part in the hiring process. Have each company send you a proposal outlining their company and what they’re able to provide.
Hire a service and set up a trial run
Once you’re ready to make the jump from managing payroll in-house to outsourcing the process, it’s time to start looking for companies that can help you out. Set up a meeting with a few candidates and ask them any questions you may have about their company and their services. During this meeting, establish a trial run and make sure you have a way to measure and track the success of outsourcing your payroll. This will help you determine how necessary it is to continue outsourcing payroll once the trial run ends. The most important thing is to find the right fit for your business. Whether you choose to outsource payroll or keep it in-house, make sure you’re prepared to deal with the newly added responsibility!
Summary
At some point in the life of any business owner, payroll will rear its ugly head. Whether it's the American services sector, a construction company, retail store, marketing agency, medical practice or another type of business, there's no way to avoid it. Payroll consists of calculating how much money each employee earns during the week or month based on their hours worked and the rate at which they earn pay. Payroll is also responsible for collecting taxes from each employee based on the deductions that are attached to their particular salary and sending that money to the appropriate tax authorities. If you hire employees, there's no way around the complexities of payroll. Having a third-party company handle all of the administrative work for you can reduce the stress and time that payroll takes away from your workday, freeing you up to focus on what matters.