Hiring a payroll processing company is the trend these days because of the benefits it can offer to your business. While it is true that payroll automation software exists to help you in the payroll preparation duties, a professional service provider offers services that cannot be done by software. Whether payroll services are good or not for you business relies entirely on your decision as the business-owner.
To help you decide on this matter, it is essential for you to understand the basic concepts of how the payroll system works. What are the different factors involved in the payroll preparation? Is it as simple as the computation of the actual hours rendered for work and the corresponding payment for that? You will learn here the different aspects involved that are needed to ensure that the payroll is correct.
More than that, you will also have an idea of the possible repercussions to your business if the payroll is not prepared on time or have erroneous entries. Matters like this must be taken seriously because the effect it could bring may be long lasting. Furthermore, you will learn here why more and more small businesses are opting for payroll company services rather than having a payroll department of their own. Discover here the undeniable advantages that you could get by outsourcing your payroll duties. Learn how and where you could get reliable payroll service providers.
Basic Facts About the Payroll System That You Should Know
How do payroll services work? First-time business owners are curious on how payroll services function because it is an important aspect of any business. Punctuality and accuracy are crucial in this business financial function. Even slight delays in the payment of your employees could trigger issues that could put the company in a bad faith.
What is Payroll?
Payroll is the process used by businesses to pay their employees for the work rendered. Employers may give the payment monthly, weekly or twice in a month, depending on the company’s terms and conditions. Payroll duties are a seemingly mundane task, but it involves careful execution of related functions. Deduction of withholding tax from each paycheck and making sure that accurate payment is given to the employees are only some of the aspects that must be correct when doing the payroll.
Business owners may face legal issues when the payroll is not properly done. Be reminded of how mindful the Internal Revenue Service (IRS) is regarding the tax-related concerns. Incorrect filing of taxes and missed deadlines may lead to fines, and worse, imprisonment. For these reasons, payroll becomes a burden and a source of stress to employers who do not have proper payroll system. Why do companies outsource payroll services could be attributed to the said same reasons.
What Is a Payroll Service?
The latest trends in the Business Process Outsourcing (BPO) industry made it possible to hire a payroll processing company. Payroll service providers are third-party businesses that offer their service to take care of everything that is payroll-related in a company. The basic service offered by such companies involves collecting information that they will use to prepare to the payroll of your employees. You are expected to give them the wage rate of each employee and the number of hours they have worked so they can calculate the gross wage.
What payroll services do may vary. The vital process includes calculation of the gross income less the deductions and withholding taxes, preparation of all employment tax filings, printing of checks, and making direct deposits. Mailing of the forms W-2 and 1099 is also included. In addition to this, the best payroll processing companies take care of IRS and nay government inquiries that are payroll-related.
Meanwhile, other payrolls service providers extend their offer for more comprehensive service. The human resources department usually handles the administration of the benefit programs and retirement accounts. Some payroll services offer to lift the Human Resources Department with these tasks, thus, giving the said department more time to focus on other important aspects of the business. Which payroll service is best? Only the employer himself can answer this as different businesses have their specific needs.
Duties of Payroll Department
It is understandable that small businesses have fewer employees at hand. A separate staff under the accounting department is needed to keep tab of everything that is needed to make an accurate and timely payroll. Why use payroll services? The direct simple answer would be to lift the burden of payroll making from your limited number of employees. Below are some duties of the payroll department.
Keeping Track of the Time Rendered for Work
Knowing the number of hours an employee must give to the company is not enough in payroll preparation. The personnel in charge of the payroll must know the actual time rendered by an employee including the overtime if there is any. Consultation with the supervisors is essential to verify that the time entered in the time card is correct. This also serves as data validation in cases where there are disputes or concerns regarding the time.
Making Sure That Employee Benefits Given Are Correct
You would think that concerns regarding the benefits should be the concern of the Human Resources Department (HRD). You are correct, but they should work closely with the payroll department to make sure that the benefits given are correct. Employees are entitled to have vacation and sick leaves. Some employees may have lost track of their leaves and applied for it unknowingly that they have used up all their leaves. When cases such as this arise, it is the job of the HRD and the payroll to correct such entries in the payroll.
The benefits given to employees are not all about leaves. The different kinds of insurance should also be considered to make sure that the business is giving the benefits due to its employees in accordance with the law. The health saving accounts, dental, medical, disability, vision, and life insurance are examples of payroll-related concerns that must be taken care of.
Why Payroll Department Is Replaced by Payroll Companies
The payroll department takes care of processing the payroll and everything in between. These days, employers find it easier to hire a third-party service provider rather than establishing their own payroll department. What is payroll service provider? They are the one that executes the job of the said department. According to the statistics provided by Forbes, around 41% of the small businesses in America use the service of payroll companies.
Who needs payroll services? While it is common for small businesses to source out the payroll job, it does not mean that the payroll service is limited to them. If you deem that your business would benefit from hiring a third-party service provider, you may hire one of the best payroll processing companies. The duties listed above are only some of the tasks that must be handled
What are different payroll services? A simple search on the web will lead you to the fact that there are plenty of payroll service providers out there. You may also get recommendations through the word of mouth. However, what is best for other business owners may mean otherwise to you. In this case, it would be for your own good to read the reviews of payroll processing companies published at CrowdReviews.com.
The CrowdReviews.com is a website known for publishing unbiased feedbacks from the users who have really tried the service of a company. Based on the reviews, you will have an idea of what kind of service a company is offering. Will the basic payroll services do? Do you want a more comprehensive offer that will take care not only the vital responsibilities but other concerns as well? You had better start reading the testimonials of other employers like you to know the strengths and weaknesses of each service provider.
In addition, a business that cannot provide a timely and accurate payroll for its employees is a reflection of poor business management. A miscalculated and delayed salary can easily go out through the word of mouth. No one knows the extent of damage that it can do to your business. Instead of beating your limited staff to do the payroll duties, you may hire third-party service providers. Reviews of payroll processing companies at CrowdReviews.com exist to help you decide on which one fits your business needs.
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