As a small business owner, you may wish there was an easier way to manage your finances. A big part of this may be managing your payroll.
It involves employees’ salaries, deductions, wages, bonuses and net pay. It’s also an area many businesses tend to struggle.
According to a TD Bank survey, 43 percent of small businesses have at least one employee. So business owners need to focus more on improving their payroll management. A simple way to do this may be by outsourcing.
Why You Should Outsource Payroll
Here are four reasons for small businesses to consider outsourcing payroll.
Comply with Regulations
Tax regulations are complex and sometimes even a small change may have a big impact on your business.
“There are nearly 10,000 tax jurisdictions in the U.S. which are changing constantly,” says Jamie Griffiths, vice president of bank partnerships at Paycor, a strategic partner of TD Bank.
“It’s very difficult for one person to manage a business and also stay up to date on these laws. Hiring an expert can remove that burden,” Griffiths tells Small Business Trends.
A well-designed payroll infrastructure can make your life easier by ensuring you comply with regulations.
Jay DesMarteau, Head of Small Business Banking at TD Bank tells Small Business Trends, “Payroll services ensure that the business complies with complex regulations and that it stays up-to-date with the latest laws. This takes a lot of weight off of a small business owner’s shoulders for a relatively small expense.”
Recruit and Retain Employees
When it comes to matters related to their pay, employees want to know everything. That includes how you’re calculating their wages, deducting taxes and even calculating bonuses. Companies that have a proper payroll infrastructure in place attract the attention of potential employees.
DesMarteau says, “An outsourced payroll service can also make the business more attractive to potential employees. These services can provide added perks such as online check stubs, time tracking and apps where employees can view pay information.”
But it’s not just about recruiting new people. A systematic payroll management system can also play a role in retaining employees who are satisfied with the infrastructure.
Make Business More Attractive
A payroll management infrastructure ensures you comply with regulations and keep employees happy. From a long-term perspective, it secures your business and makes it more attractive for investors.
“While a payroll service is an additional budget line item, business owners need to think of it as a long-term investment that can make the business more attractive to potential investors, buyers and banks,” says DesMarteau.
Plan Business Growth
When you don’t have to spend time and resources on payroll management, you get more time to focus on other things such as business growth. By freeing up your internal resources, you can look for other areas that can support and sustain that growth.
DesMarteau explains, “With someone else worrying about pay stubs and direct deposits, an owner can better focus on long-term growth and the business at hand.”
Payroll Photo via Shutterstock
Outsourcing takes the headache out of your daily routine especially if your business is expanding. This allows you to focus on tasks that are more important.
I learned that business owners spend an average of 6 hours a month performing payroll related tasks. That’s a lot considering all the other tasks a business owner has to handle. Outsourcing makes sense.
It’s interesting to know that there are a lot of tax regulations to think that payroll services can guarantee to comply to on my behalf. When I was planning to the amount of staff I’d need for a restaurant business that I’m planning to open next year, I realized that my kitchen crew would be larger than I anticipated. I think hiring a payroll service would definitely ease a lot of burden off of me.