Like most business owners, you are well aware of the time and energy that goes into ensuring your employees get paid promptly and that the right tax amounts are diverted to the government. This means more than simply staying on top of hours and signing a few checks.
Because processing payroll can be such an unwieldy task, many business owners and managers are switching to an online payroll service. But is it the right fit for you? Here we will discuss the benefits of utilizing a payroll service and how managing payroll online can save you both time and money.
Are you in need of an online payroll service?
The first big question for any business owner or manager when incorporating ANY new service into their organization is ‘Does this make financial sense for me?’ If you or someone on your staff is already an expert on accounting and tax laws, then it likely makes more sense to keep your payroll processing in-house.
However, if you don’t have someone well versed in umbrella payroll responsibilities like the proper filing of quarterly reports, paying withholding taxes to the correct government agencies, or someone to see 501c3 application status, in a timely manner, managing employees’ health and pension plans, handling state disability, unemployment, and other necessary assessments, then managing payroll online can be a huge benefit for your organization. If you’re just starting out or have recently expanded, proper payroll management can quickly become overly burdensome. Businesses failing to properly track their payroll in accordance to federal and state laws can face heavy fines and even potential criminal penalties.
Will I save money by managing payroll online?
The short answer is a resounding yes! Unless you currently have someone who is both educated and efficient in every aspect of payroll management, outsourcing can be much more cost effective. Online payroll management companies offer simple package fees. Whereas an in-house payroll processing staff requires its own hiring, initial set-up fees and maintenance costs of payroll software.
This means that, depending on the specifics of your business, such as the number of employees, pay frequency, state of residence, etc., you could save money with online payroll.
You can determine just how much your business could save with online payroll by calculating your cost and the hours employees devote to payroll-related tasks and comparing that amount to payroll packages. When you calculate your expenses, don’t forget to include the amount your business spends on printing and distributing checks. Most employers find that online payroll packages are a lot more pleasing than the cost of an in-house hire when they calculate their costs. Even though the market for payroll is competitive, you may find that basic service costs are as low as $0.80 – $2.00 per check. Depending on your package, you may have to pay a small extra fee for year-end tax assistance.
Will this help my employees?
Employees absolutely benefit from the management of payroll online. With an open access system, employees are able to easily request paid time off, view and track their payroll stubs, request direct deposit in lieu of paper checks, securely view their personal HR information, and much more.
Often times both employees and employers can become frustrated when the above information isn’t readily available, such as when suspected discrepancies force both members to waste time and energy searching out the proper paperwork. With an online payroll management system, all of that information is accessible with just a few clicks of a button.
What are my options for managing payroll online?
There are four key options available:
Go it solo. If you feel confident in your or your employees’ skills, then you can purchase, install, configure, and enact the payroll management software internally.
Application Service Provider (ASP)/e-service. With this service, you don’t have to purchase, install, or configure the payroll online software. Instead, an online management cloud application company hosts the software on the Internet and ‘rents’ it to you.
Outsourcing to a Payroll Provider. This is the preferred option if your company is small (think fewer than 8 employees) and you’re just starting out. Ideal for those who are just beginning, or are about to expand, and want to ensure their payroll management is on point from the get-go.
Outsourcing to a PEO/ASO/HRO model. If your company has five or more employees, then it’s time to consider a whole HR suite in terms of payroll online management. Companies who benefit most from this are those with fewer than 100 employees. Within this size, a business doesn’t typically have the best resources for managing HR, but has the need for efficient payroll management. It’s important to remember that HR and payroll management must be handled correctly as nearly to 100% of the time; just a few slip-ups can mean huge business problems.
To learn more about managing payroll online, and more specifically about the breakdown of the above strategies, check out our eGuide “The Best Kept Secret for Small Business Success”. At UniqueHR we are well-equipped to provide the best HR solutions to small- and mid-sized businesses both in the state of Texas and nationwide. Contact us today to learn more.