Payroll services are required by most businesses, regardless of size. Whether you are a small or large business, payroll is imperative to your bottom line. Understanding the basics of payroll services can help you determine whether they are right for you and your business.
The definition of payroll services can be quite vague, but it basically means that it is an outsourcing company that manages your payroll and pays your employees. Payroll services differ widely in cost, depending on the extent of services you require, but most generally charge a flat base fee or annual payment that ranges from several hundred dollars to a thousand dollars or more per pay period or monthly cycle. They may also offer other options, such as giving you access to an employee’s retirement account or providing investment advice. Many businesses also offer payroll tax assistance, including filing payroll taxes as well as filing additional government forms related to social security and Medicare.
The vast majority of payroll services are designed to fit the needs of small businesses, though larger businesses may also find some value in them. For small businesses, online payroll solutions are often provided at no extra charge, as these businesses usually have a very low overhead. However, there are a few exceptions to this rule, particularly if you are using an existing system for data entry or accountancy needs.
The most common use for payroll services is to allow business owners to get paid without having to spend valuable time in front of a computer. Online payroll solutions allow you to set up a simple account that collects your pay from paychecks and bank deposits and debits them electronically, often automatically. Because many small business owners use their home computers as their main workstations, this convenient option provides an easy way for them to get paid. By taking advantage of payroll services, business owners can eliminate the need to rely on their personal cash flow to get paid. For many companies, payroll services are also necessary for receiving multi-state tax filings. These taxes, which include corporate, income, and gift taxes, must be submitted on a timely
basis to comply with the many state and federal laws regarding taxes. Without timely tax payments, the Internal Revenue Service can issue liens and garnishments against companies, resulting in the inability to process credit card transactions or accept any advances on credit. Without this important source of income, many businesses are unable to conduct their day-to-day operations. By allowing companies to submit their taxes electronically, and bypassing the often-too-costly multi-state tax filings, these businesses will not only get paid more often but will be able to avoid missing out on billions of dollars in profits due to tax lien and garnishment issues.
Most companies do not choose to utilize payroll services for workers’ compensation and/or unemployment benefits, because doing so increases costs, and the time it takes to submit the appropriate forms. However, by using payroll services, businesses save valuable time that can be used to increase revenues or improve employee performance. For example, when an employee makes an insurance claim, it may take a business owner several days to submit the proper forms, make the necessary phone calls, mail the appropriate forms to the right offices, and receive payment. Instead of spending those extra days waiting for the paperwork to go through the regular channels, many business owners decide to utilize payroll services. After all, it is much easier to receive payment from an employee’s insurance company or another third-party company, than it is to wait for a pay stub from the insurance company, which may take weeks or months to arrive. Using payroll services allows those who may be receiving benefits to receive them quickly, which dramatically improves customer service.
Using online payroll and employee management systems is another way that online payroll services can benefit small businesses. Small businesses often find it difficult to keep up with paper-based paperwork. When an employee submits their weekly or bi-weekly paycheck, they generally have to write down the amount owed to them, their address, their hours worked, their employer, their job title, their phone number, and other information. This process can be extremely tedious for some employees, especially for those who have children or other dependents at home. By allowing employees to complete their work on their personal desktop computers, businesses can eliminate the tedious paper process. In addition to eliminating the tedious paper process, online payroll solutions also offer small businesses the ability to access their employees’ financial records via the Internet. Hiring a payroll services company is a great way for small businesses to make payroll to free themselves from the hassle and paper-based record-keeping that other traditional businesses experience. These businesses saving money by utilizing online payroll services, as well as increasing revenue by not having to print paper checks. The ease and convenience of utilizing these services, along with the assurance of accuracy that comes with using reputable online payroll services, make online payroll services the perfect solution for many small businesses making payroll. For additional information regarding online payroll services for your specific business needs, contact a payroll services provider today