Congratulations! Your business is flourishing! Now it’s time to expand your team.
But as you might already know, more employees can mean more time spent on payroll and other administrative tasks. You need to find the right people, get them interested in your company, bring them onboard with all the correct paperwork and forms, and then add them to your payroll.
As important as these activities are, you may find that doing all of them yourself is not the most efficient way to go. Here are some factors to consider.
Is doing payroll the best use of your time?
As many business owners before you have found, payroll doesn’t get any easier when your company gets bigger. It just takes more time. Unfortunately, there’s only so much time in the day. And if you are successful and growing, you are probably making the very most of your days already.
So, do you really want to put more effort into processing your own payroll? Do you want to take more time out of your busy day to handle these kinds of administrative tasks? Does that help make you money, or grow your business?
Likewise, if you or your people are going to put in that time, wouldn’t it be better if it was used for generating business, servicing customers, or getting billing done? In other words, for the activities that actually make you money?
When your team grows, these are critical questions. The time that can be saved from outsourcing payroll is often a key motivator for many business owners to switch to a professional payroll provider.
Are you ready for more payroll complexities?
As you add employees, you are also adding more complexity to your payroll processes.
If you’re doing your own payroll, you already collect and tally the hours worked by each employee. Now there will be more employees to track. There will also be more wage and pay calculations, since employees may be working different hours and at different pay rates. Then, for every employee, you’ll need to calculate and deduct the correct amounts for FICA, federal, state and (depending on location) local income taxes, any applicable wage garnishments, and any other withholdings. Finally, you’ll need to print and sign more paychecks.
Each of these steps presents the chance for a mistake, each and every pay period. And as your team grows, the potential for making a mistake grows.
Even the most honest payroll errors can hurt your employees and your business, and lead to trouble down the road. That’s why many business owners opt to outsource to a professional payroll provider once they start adding employees and complexity.
How solid are your security and compliance?
It is safe to say that most small business owners are not experts in data security and federal and state payroll and employment laws and regulations. When you have just a few employees, these often don’t seem to be big concerns, but as your team grows, the risk of costly errors grows as well.
For example, with in-house payroll teams, there is always a risk of embezzlement, identity theft, or tampering with company records for personal gain. These risks increase as you add more employees. There are also challenges related to the payroll data on your company’s computers and networks – both keeping it confidential and secure, as well as making sure it is backed up and archived.
Just as your security challenges will grow, so too will the challenges that stem from complying with federal and state payroll and employment laws and regulations. In this case, payroll errors can lead to time-consuming audits and costly penalties. As you add employees, you are only increasing your responsibilities to correctly withhold, remit, and report employment taxes to federal and state agencies.
By outsourcing to a professional payroll provider, you don’t have to bear the burden of all these potential headaches and risks on your own.
Growing teams are a sign of a growing business. While there can be many new administrative challenges, these are good problems to have.
The question is, what is the best way to address these new problems? Many business owners find that outsourcing payroll makes a lot more sense than trying to do it in-house. Reputable payroll experts have systems and processes in place to make payroll processing more secure, accurate, and efficient.
With the right payroll company, you can also get access to new technologies, more affordable benefits packages, and a long-term solution for employee management as you continue to grow. At the same time, you can save time, reduce the chance of costly mistakes, and free yourself up to keep your business growing!