4 Options for Small Business Payroll

Payroll closes many a small business. New business owners invariably underestimate the direct and indirect impact of payroll. So, no business should open its doors without a compensation plan and the administrative know-how to make it happen.

You learn pretty quickly that payroll involves a lot more time and talent than writing checks. Either that or you find out too late that you are not calculating hours, overtime, and deductions correctly let alone transmitting those records to the appropriate compliance office.

The newest business can prepare its payroll on little more than an Excel spreadsheet. Microsoft has even built in some usable templates for the smallest business obligations. However, when you find the payroll taking too much time away from your core business tasks, it's time to move on to time and attendance software.

Payroll is more than money in the pocket!

As far as your employees are concerned, payday means money in their pocket. However, the business owner must make tax payments to the state and Federal governments. Those payments require specific calculations and informational backup. You must also prepare W-2 and 1099 tax forms along with evidence of payment made and deductions withheld. Because you have to deal with employee perceptions of accuracy and timeliness and because you are vulnerable to significantly punitive fines, you need to get payroll right.

So, what to do?

The first piece of advice is to move on. Payroll administration is just too time-intensive for the business owner.

  • Option #1: Many owners pass the administrative burden to their administrative assistant or office manager. However, this just shifts the weight not the liability. Payroll administration just eats into their time and talents.
  • Option #2: You can invest in time and attendance software off the shelf of your local office supply store. Some of these programs provide excellent service when you workforce remains small.
  • Option #3: According to the Bureau of Labor Statistics and Salary.com, Payroll Clerks earn a mean income of approximately $40k/year. Such a position does give employees a "go-to" person for complaints, but you have to weigh the value against this increase in the labor burden.
  • Option #4: Many small businesses will outsource their payroll functions to a virtual payroll clerk or payroll service. This can be more cost-effective than hiring a dedicated Payroll Clerk, but it will require your oversight because the reporting liability is still yours.
  • Option #5: Most growing businesses have come to realize the advantages of running payroll through cloud applications. It eliminates manual calculations, paperwork, and multiple spreadsheets.

Consider cloud-based payroll!

Cloud-based or not, contemporary time and attendance software does away with time cards and clocks.

  • This facilitates both the employee process and the personnel function.
  • It virtually eliminates inaccuracy and speeds the administration.
  • Employees and managers have real time access to authorized information from any platform that has internet access.
  • It keeps employees honest by eliminating "buddy" clock manipulations.
  • Reports are accurate, complete, and customizable.
  • Reporting from remote or at-home locations becomes easier and more reliable.
  • And, time and attendance software is scalable allowing and anticipating your business needs as the workforce grows.

    Perhaps most important to the business owner, a cloud payroll system will quickly pay for itself. Most providers charge a small fee per user per month, far less than the cost of outsourcing or hiring. You can shop online for such service and select the one that promises performance, security, and customer service.

     

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