
Pursuing a Business or Side Hustle That Works Without You
BOOKAFY BLOG Pursuing a Business or Side Hustle That Works Without You IN THIS POST Launching a business or a different money-making operation is much more achievable now. Yet, many
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Incorrectly filing payroll can cost your business big-time, and not just from money owed to the IRS. Severe payroll mistakes can hold your company and its CEO legally liable for incorrect bookkeeping. Ignorance won’t hold up as a defense if you neglect to pay back taxes.
Unfortunately, the likelihood of you being penalized for payroll errors by the IRS is nearly 1 in 3, and small businesses are the likely culprits of non-compliance. Overall, the numbers are against you, literally, but you can protect yourself from legal disputes by outsourcing payroll.
Companies that specialize in payroll services work with clients to ensure they’re meeting federal and state legal obligations. Payroll services take the worry out of HR management and payroll tasks, allowing businesses to focus on scaling, marketing, and company culture instead.
Payroll is more complicated than simply writing checks and waiting for the employee to deposit company funds. Payroll services offer a wide variety of services, including the following:
Although in-house payroll administrators can accomplish 1-5 in some fashion, they can’t guarantee compliance. If your staff breaks the law, the employer and employee may be liable.
There’s no denying that tackling payroll in-house presents severe challenges for businesses of all sizes. Handling payroll taxes, time, attendants, and workers’ compensation is already complex from a numbers standpoint, but once you factor in the possible fines for a misplaced zero on one of the many types of payroll deductions, the stress really starts to add on.
Even if your in-house staff members are appropriately trained, you are still left with one employee for an entire business you expect to scale. On top of that, managing additional employees increases your overhead, as you’ll need at least one replacement for your payroll administrator if they’re out sick or on vacation.
Outsourcing your payroll services will mean you have less submission flexibility. When seen as a positive, it just means your tax filing process will be smoother and decrease the likelihood you’ll be fined. At the end of the day, hiring a payroll service is typically the better choice.
A payroll service offers your business multiple benefits and frees you from liability if the IRS comes knocking at your door. However, not all payroll services are made equally. To ensure you’re hiring the right payroll service provider for the job, consider the following.
Basic payroll services, like writing and processing paychecks, are basically a given for all companies you’re looking to hire. However, they may not offer integrated human resource services, pre-employment screening, or workers’ compensation. Ask all payroll services what they’re offering your business because assuming will leave you unhappy and broke.
When asking a payroll service what they’ll bring to your business, bring up their customization options. As a business, one of your main priorities is to scale, but a basic service won’t be able to handle out-of-state taxes, international employees, or remote workers. If that’s the case, you’ll need a company that is capable of handling large businesses with an international focus.
Payroll services will take over a prominent aspect of your company, and you’re essentially putting your business in a stranger’s hands. To help you get peace of mind and smooth the transition between in-house payroll to remote, search online for reviews. Don’t stop there. Talk to clients they’ve worked for, the chief financial officers, and the public accountants, as well.
Most pay-for-service companies will hide their total costs to make them seem less expensive than they actually are. The starting cost for outsourcing payroll is a flat fee that compounds based on the frequency of payments or number of employees. You might also be charged fees for filing taxes, accounting, and direct deposits. Ask for a total print-out for each service.
Timely payroll services are interested in protecting your assets, bottom line, and reputation, so always hire a team that wants to ensure you’re comfortable. Your chosen payroll company should respond within 24-hours of a harmless question sent by email and within the hour for mistakes. Suggest multiple ways you can stay in contact if a payroll dispute does happen.
Never assume that a service is offered when they didn’t specifically say it was. Although payroll companies will sign a power of attorney when establishing you as a client, ask the service provider directly if they are taking on responsibility for payroll errors. Any wishy-washy answer should be met with a ripped-up contract and a swift departure from the meeting room.
Your employees’ data should be protected at all times. Ask if the payroll provider meets SAS 70 or SSAE 16 standards, which ensures they have control over information technology and related processes. If they say yes, but you’re not convinced, buy a report from a third-party auditor that provides proof. All payroll companies should follow the appropriate audit policies.
Although most legitimate payroll services won’t withhold information from you, it’s still important to ask your provider questions that will help you feel at ease. However, even the most intelligent questions can yield untruthful answers, so it’s important to take the payroll company for a test drive. This way, you can see how the service will perform when you’re their full-time client.
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