Owning a small business means having to wear many hats. Among the tasks that a small business owner can be faced with on a daily basis:
- Hiring and firing employees
- Promoting the company via various advertising and marketing campaigns;
- Overseeing the company budget;
- Meeting the payroll needs of both employees and making sure all company bills are submitted in a timely fashion.
As you can probably sense, being a small business owner comes with major responsibilities. So what happens if that man or woman is overrun with responsibilities, meaning some of the above-mentioned tasks do not get their full attention?
If there are problems meeting payroll on time, not only can one end up with financial problems (employee paychecks, payroll taxes etc.), but they can also find an office with high worker morale problem.
In the event your small business (typically those with 50 or more employees) may want to outsource its payroll needs, consider some of these thoughts:
1. Get various quotes – Just as you do with any other business purchase you are considering, be sure to research a number of small business payroll providers or employ the use of a payroll calculator. Look at their ability to service your company, their financial stability, customer service track record, and the size and range of the customers they currently have. If they can offer you a free trial run, all the better;
2. Attention to detail – Even if you remove the payroll task from you and your team, it still behooves you to check for any errors. Along with the potential for unhappy employees if the payroll is inaccurate, you also stand to suffer potential penalties from the IRS if payroll tax payments are incorrect. Make sure any payroll provider you sign off with clearly states their responsibility for any inaccuracies in completing payroll (see more below). Even if they do, you (as the small business owner) are ultimately responsible, so never assume everything is fine and it doesn’t need your attention from time to time;
3. Security does matter – When going with an outside payroll provider, keep in mind that you will need to transmit your employees’ hours to the provider, typically on a bi-weekly basis. It is critical that such data be transferred securely, meaning an employee’s personal information is not compromised. While many small businesses use electronic means to send such information, others still rely on phone and fax systems. Make sure no matter how it is done that all information is protected during the transfer, including an employee’s address, wages, and Social Security numbers;
4. Customer service assistance – The last thing, keep in mind it is a very important item, is the ability of the payroll provider to give you excellent customer service. Given you have entrusted an outside payroll provider with one of your company’s most important needs, you also need assurances that their customer service will be second to none. Will they get back to you via phone or email in a timely manner regarding questions or issues? Do they work or compete with other small businesses similar to yours, meaning they have experience with such companies who have needs much like you have? Finally, are they going to offer any discounts, special deals etc. should there be mistakes on their end, not to mention removing you from any bad encounters with the IRS (According to the IRS, it assessed some 7.7 million civil penalties related to employment taxes alone in 2011, resulting in a total of $5.3 billion in assessments)? If they seem hesitant to take responsibility for problems on their end, you are probably better off finding someone else.
If you’re looking to outsource your small business payroll in 2013, you may discover it was one decision that will pay off for you in more ways than one.