One of the biggest headaches businesses of any size have to go through is paying their employees. In the old days, this used to be a fairly simple task. But today, between tax withholding, health insurance, 401k, workman’s comp, etc. the whole thing can become a very cumbersome task. Many businesses choose to outsource this work to a payroll processing company. There are several reasons for this trend, here are 4 of them:
Doing your payroll processing in-house means you will need one or more employees dedicated to that task. This means going through the trouble of training them and getting them up to speed on your system. Then when they leave, you go through the entire cycle again. This can become rather costly after a while. On balance, it’s better to leave this work to payroll companies that are experts in the field. This way, your work is handled for you by people that know what they’re doing, and you can dedicate your in-house team to more productive tasks that are pertinent to your business.
2. Stay Out of Tax Compliance Trouble
With the tax laws constantly changing, it is difficult even for experts to keep up with everything. But when a small or medium-sized business needs to be up on all the latest changes in the tax code, it can put a heavy burden on the company’s HR department. When you outsource your payroll services, you outsource your tax compliance headache to someone who is up on all the tax laws and whose job it is to make sure their clients are doing everything properly according to the law.
3. Easily Offer Direct Deposit to Employees
In today’s world of electronic transactions and access to money, most employees not only prefer to have their checks direct-deposited into their bank accounts, they expect it. This, however, does not just magically occur. It has to be set up with each and every new employee, which requires getting all the paperwork to and from the bank. And even when you do everything right, the checks still don’t always get deposited correctly. This is another headache you can easily give over to the payroll processing service. Again, it’s their job to make sure these deposits go smoothly, so why not leave it to the experts?
4. More Efficient Payroll Processing
When you’re in business, one of the most difficult challenges is to be up on all the latest technology. It’s a constant worry, because you know that if your competition is doing things more efficiently than you are, they can offer the product or service for less cost, putting you at a disadvantage. When you outsource to a payroll services company, you can be virtually assured that this will not happen in the area of paying your employees. Payroll companies most often have the latest technology, enabling you to do a number of customization tasks (usually online) to make it far easier for you to process your employee payroll. This, in turn, saves you money, which ultimately makes you more competitive in the marketplace.