For every small business that has employees, handling payroll is a time-consuming, mission-critical, ongoing demand. There is a big learning curve for anyone who wants to really understand payroll administration. Errors – including miscalculations, confidential information leaks and missed deadlines – are realistic risks that can come with costly consequences, including monetary losses, diminished employee trust and government penalties. The IRS, for example, frequently levies hefty fines on business owners for payroll deduction and calculation errors.
For many small and mid-sized business owners, a preferred solution is to rely on a professional employer organization’s (PEO) payroll administration services. Outsourcing this important part of your business to a PEO as a trusted partner eliminates all the hassles of getting your employees paid.
When Should You Outsource Payroll?
On average, business owners spend more than five hours per pay period working on payroll and paying payroll taxes. In the span of even a couple of pay cycles, this work consumes an inordinate amount of time. And that time could be spent on other facets of your business, such as dealing with budgeting, handling customer service issues or developing strategies to meet your future goals and objectives. In fact, handling payroll can be one of a small business owner’s biggest challenges.
How do you decide whether there could be advantages to outsourcing payroll? Start by performing a detailed breakdown of exactly what payroll is costing you in time spent and, as a result, in lost business. Keep in mind that payroll is more than just issuing paychecks; it entails tax reporting and filing as well as managing employee benefits, among other payroll-related duties.
When you know your true cost of doing payroll yourself, you will be in a better position to decide if outsourcing payroll makes sense from a financial and productivity standpoint.
The Payoffs of Outsourcing Payroll
There are other factors to contemplate, as well. For example, there are benefits of partnering with a PEO payroll service provider you should take into consideration when deciding if you are ready to commit to outsourcing.
Outsourcing Payroll Saves Time
If your small or medium-sized business cannot afford to hire an experienced in-house payroll administrator, then you might seriously want to consider outsourcing this function. Per year, you could easily spend more than 100 hours dealing with your company’s employment tax issues alone. The decision to assign this responsibility to a PEO could add hours and hours of productivity to your schedule. Saving time is one of the biggest benefits of outsourcing payroll.
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Outsourcing Payroll Decreases Costs
When you calculate the in-house costs of staff time, software, training and compliance-related expenditures, outsourcing payroll is a money-saving option. When you decide to outsource this function, you are likely to notice cost savings almost immediately. Further, outsourcing always saves a small business owner the time-consuming headaches of payroll management and can increase productivity among the employees involved in payroll. Those employees no longer have to commit big chunks of their day to that routine.
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Outsourcing Payroll Lowers Tax Risks
Federal, state and some municipal governments have complex and individualized employment tax laws. The laws are subject to frequent changes, making it difficult for small and medium-sized businesses to avoid mistakes and maintain compliance on their own. Even one small oversight related to a payroll tax withholding that goes uncorrected for an extended period can become a major liability.
PEO clients do not have to worry about such issues because they work with payroll tax specialists who maintain vigilant awareness of employment tax laws. Partnership with a PEO ensures both compliance and seamless payroll operations.
Axcet HR Solutions, a Kansas-based PEO, provides each client with a dedicated payroll administrator who is supported by an expert team that specializes in managing the complexities of payroll administration, taxes, and legal compliance. It is our job to ensure that benefits and other withholdings, as well as overtime or other additions, are calculated accurately. That way, your small business always pays the precise amounts you owe your employees every pay period. We take that responsibility seriously.
Axcet’s PEO payroll services protect small business clients from year-end tax surprises that could undermine their success. And, as a certified PEO, Axcet is solely liable for the federal employment taxes on wages paid to clients’ employees, another benefit that insulates clients from penalties. Certification is an added level of security Axcet believes is owed to our clients in maintaining their trust.
Outsourcing Payroll Enhances Data Security and Accessibility
Cyberattacks are a growing threat, especially where small businesses are concerned. In fact, surprisingly, hackers view smaller companies as more vulnerable targets than larger companies. Payroll processing has become a new and popular inroad for hackers.
A PEO payroll provider protects against data breaches and cyberattacks with strict security protocols, providing the added benefit of ensuring your information is safe. Axcet’s payroll system is monitored around the clock, and we maintain redundancy, back-ups, and on-premises storage, as well as an auxiliary location, to maintain secure and uninterrupted payroll services.
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Outsourcing Payroll Ramps Up Technology Access
When it comes to payroll, workers want peace of mind knowing their paychecks will be accurate and on time. Partnering with a PEO payroll administrator gives your company access to the latest HR technology without the costs and headaches of purchasing, maintaining and upgrading systems on its own. Your employees can trust the payroll process, which reinforces your reputation as a reliable employer.
Through Axcet’s self-service site, employees can access all their information at any time and from any device. The system is optimized for smartphones, tablets, desktops, and laptops – it automatically adapts to the user. For example, employees can use the portal to easily update their pay-related personal information and find answers to questions like how much paid time off they have available. This transparency builds trust and loyalty.
The user-friendly client portal is a valuable resource that makes it easy to generate standardized reports like invoices, payroll registers and check journals. Employers also can customize reports to fit their specific needs. With this technology, every aspect of payroll administration gets done more efficiently.
Is your business ready to outsource its payroll administration function to free up time and resources, gain access to innovative technology, reduce costs and risks, and improve the employee experience? Download our FREE report to find out what to look for when searching for a PEO. Or contact us today to see how our payroll administration services could make your life a lot easier.