Signs You Need to Outsource Payroll

When starting a business, most people think that handling payroll will be a pretty simple task. Really, how hard is it to prepare a couple of paychecks for a handful of employees?

We are hoping to provide you with some insight as to how managing your own payroll could actually take up more time than you think. After talking with clients, we have actually found that a small business owner could spend 15-20 hours each month overseeing their business’ payroll by themselves.

Many small business owners we work with say that outsourcing their payroll to Warren Accounting Group has saved them lots of time, money, and headaches. So, if you are struggling to keep up with the math, having a tough time remembering FICA, FUTA, and SUTA, or you simply cannot stay organized, Warren Accounting Group is here to help.

If you have been thinking about outsourcing your payroll services, here are some signs that you may want to explore your options by giving us a call to see if we are the right provider for you. Outsourcing your payroll may be a game-changer for you, enabling you to focus your efforts on growing your business and generating larger revenues.

Here are some signs it is time to outsource your payroll:

Sign 1: You are making errors.

As an employer, you never want to under or overpay an employee. However, if you are overwhelmed by the amount of paperwork, you may be making mistakes when rushing to complete payroll in the evenings. Plus, it is not just about paying your employees on time, it is also about getting the number of allowances, deductions, and hours worked (among other things) correct. If you make an error, you may have to correct your payroll which could affect your tax filings and could lead to mistakes you will not catch!

When you outsource your payroll services to Warren Accounting, your errors will be reduced because we are doing the math for you. However, if there is an error, we can run a new check and update your tax filings – you will not have to worry about catching things like that!

Sign 2: Missing tax filings/deadlines.

In most states, a typical small business has at least eight separate payroll-related tax filings to make each year: Quarterly filings of IRS Form 941, plus similar state filings. Making sure these are processed on time is just one more burden that sneaks up on small business owners. If you are filing late, the penalties could be costing you money.

In addition to the state and federal filings noted above, you will also owe employees and contractors wage statements at year’s end. W-2 forms for employees and 1099 forms for contractors must be delivered by January 31 for the year prior, and they must also be filed with the Social Security Administration and the IRS by January 31. Again, there are penalties for late filings.

When you outsource payroll to Warren Accounting Group, we will handle all these filings and creating W-2s and 1099s for you.

Sign 3: You bill hourly for professional services.

If you are taking time to do your business’ payroll, that means you have to stop working on something else. If you bill hourly for your time or if you or the number of clients, patients or customers  you see (such as lawyers, doctors, dentists, etc.), it means there’s a very real cost when you stop to run your office payroll.

An example of this would be, if you earn $100 an hour and you spend 15 hours a month on payroll, you are giving up $1,500 in earnings. Of course, your math may vary depending on your billing rate and the amount of time you are currently spending on payroll; however, it should be easy to do a cost-benefit analysis by comparing against outsourcing payroll services.

Sign 4: Lack of experience.

Some parts of your payroll preparation will be easier than others. But if you offer benefits, you will have the added complication of withholding and deducting contributions your employees make. This is where not being very experienced with payroll preparation could cause a problem.

From time to time, you may also get a notice that alimony or child support needs to be deducted under a court order, or one of your employees may have a tax levy against them. If this happens, you are responsible for deducting the monies and remitting to the appropriate party each payroll period. It is another thing most small business owners would rather not deal with or are not prepared to deal with.

Whether you are deducting benefits or wage garnishments, payroll outsourcing services usually make it easy to automate the process. And it will be one less thing you need to learn or worry about!

Sign 5: You simply do not have enough time.

Preparing payroll could be taking away from running or growing your business. Quite simply put, you do not have time to do it all.

One of the advantages of outsourcing payroll services to Warren Accounting Group is that we will take care of all the daily, weekly, and monthly tasks involved with paying your employees and keeping up with taxes. This will free you up to focus on core business activities instead.

While we know there are advantages of keeping your payroll in-house, such as maintaining control, avoiding a vendor expense, and having more flexibility for wages, outsourcing your payroll may be a good option if you want to avoid the complexities of doing payroll, ensure accuracy each time and provide you with the time to focus on your business.

Think you are ready to outsource your payroll? Call Warren Accounting Group today to learn more about our services and to see how we can help your business.