It’s no secret that outsourcing payroll functions is a smart move for large businesses. Does that still hold true for smaller operations? The answer is yes. In fact, making arrangements with one of the local payroll services may provide advantages that you never considered before. Here are some examples to think about.
Managing Employee Wages and Benefits More Efficiently
With smaller operations, there’s not usually a lot of extra cash around. Every dollar spent must count. That’s true for staff as well as supplies and equipment.
Opting to outsource payroll functions means that the business can operate with fewer people involved on your end. In fact, you may be able to manage just find with a CFO and one assistant. As long as there are points of contact to communicate data to the payroll service, the rest is managed outside the business. This translates into lower costs for wages, salaries, and various types of employment benefits.
No Worries About Sickness Slowing Down Pay Period Processing
What would happen if you did have an in-house team for the payroll and most of them were out during the flu season? How would the payroll get done on time? Can you be sure that every detail would be correct? For many small business owners, the answer is no.
By outsourcing the payroll to a trusted partner, you never have to worry about this type of event. Most services dedicate a team to each customer. There are also backup measures in place. That means the payroll is always processed on time.
The Latest Tax Laws are Used Every Time
Laws related to employment taxes change from time to time. While it may be difficult for a small business owner to stay on top of those details, most payroll services know when the changes go into effect and adapt accordingly. This is good news for you, since it means the tax forms and funds that are sent to revenue agencies are always in full compliance.
There’s another way that the expertise of the payroll service is helping. Thanks to their efforts, you get to avoid incurring any types of fees or penalties associated with incorrect data. If any questions do arise, the service will be right there with you during the audit.
The Possibility of Payroll Financing
Have you heard of payroll financing? It’s a service that some payroll service providers offer. Essentially, this is a way to get an advance based on the amount of business you usually do within a given time frame. Generally, the period for repayment has a term ranging from a week to a four weeks.
Why would this be helpful? You can borrow funds up to a certain amount and then repay them from your future cash flow. Think of what this would mean if you may have a short-term lack of funds to cover basics like the payroll or some operational expense. Instead of trying to figure out a solution, arrange for an advance with the partner and get things back on track.
There are other ways that payroll outsourcing can be practical for a small business. Talk with a service and outline how you currently do things. It will be easy to develop a plan and demonstrate what the service can do. Try it for a few months and see what you think. Once you see how smoothly things go, you will know this is the right solution for your small business.