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By Don McLoughlin
Do-it-Yourself Software
In increasing numbers, small businesses are turning to technology for help with their payroll to speed-up processing and improve accuracy.
Do-it-yourself payroll programs are ideally suited for small business owners who seek full control over their payroll processing and tax filing. Software solutions are typically cost-effective and give an “in-control feeling.” Once you input your payroll information, the software automatically calculates net pay for each employee. Product features are typically available 24/7, so you can process payroll whenever it is most convenient.
Outsourcing Payroll
Another option for small businesses is to outsource payroll. By outsourcing, small business owners pass on the responsibility of payroll to either an accountant, bookkeeper or third-party service provider, so that their time can be redirected to other strategic initiatives.
Once you are set up with your payroll provider, the owner simply submits hours worked by each employee. The provider calculates your payroll, including the deductions and withholdings for all relevant tax jurisdictions. Then professionally printed checks, pay vouchers and reports are delivered to your door on payday. Many service providers also manage W-2 creation at the end of the year, allowing seamless integration with accounting.
By working with a national payroll service provider, you can feel confident that payroll will be accurate, on-time and fully compliant with federal, state and local tax regulations. Based on ADP research5, the reasons companies decide to either change payroll processing method or the vendor used for the service delivery are to: save time (33 percent), effort (25 percent) or reduce costs (20 percent). Other reasons cited were tied to customer service, internal issues and familiarity.
Choosing the Right Solution
Ultimately, payroll is a task that every business needs to get done, but each business owner must decide the best approach. With the technology available today, many are choosing to evolve from manual pen and paper to either software or outsourcing – depending on how involved the owner wants to be in the payroll process.
Before moving forward, it is important to evaluate goals. Are you willing to dedicate time to payroll, but want to increase accuracy and compliance? Or do you want to lessen the burden of payroll administration completely?
No matter which payroll method you choose, it’s important to select a software package or outsourcing provider that best meets your needs. Evaluate your options, determine what is most important to your organization, and ask for references from your peers. This is especially important when selecting an outsourcing provider. Your success is based on the expertise and reliability of your partner – it’s essential that your goals and values are aligned.
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