Do You Really Know What Is Involved With Payroll Management?
One way that many small businesses like to cut corners is by providing their own in-house payroll services.
It does seem easy enough to calculate pay and then cut payroll checks, right? Truthfully, there is a lot more to payroll management than a few quick calculations.
Done efficiently and correctly, doing payroll is actually quite time-consuming, which is why there are entire payroll companies out there offering their services to business owners that have plenty of other things to do.
What Makes Up Payroll Management?
What is involved in payroll management? All of these different steps:
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Gathering and managing employee personal and payroll information.
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Calculating each employee’s gross pay.
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Calculating net pay amount by determining and subtracting pre-tax and tax deductions.
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Calculating employer-paid taxes like unemployment taxes, Medicare and social security taxes, and local taxes.
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Reconciling all calculations to check for correctness, then creating payroll journal entries.
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Cutting and distributing payroll checks.
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Submitting healthcare, tax, and retirement payments.
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Creating, storing, and distributing weekly, monthly, and yearly payroll records documents.
Payroll Involves A Lot of Work
From just this list it should be easy to see that there is a lot more involved in the correct execution of payroll services for any business.
All of these steps need to happen every pay period to keep the business accounts correctly balanced and to avoid the problems that can happen when taxes are not properly estimated or not submitted on time.
Making the required retirement and healthcare payments just add more complexity to the process, which can and should take hours each pay period.
That is all time that a business owner could be using more effectively, making their company more profitable, instead.
Why You Need To Use A Payroll Company
Payroll companies provide a specialized accounting service that every business with employees needs.
In times when tax laws, healthcare costs, and many other financial business factors continue to change, keeping up with it all can keep business owners away from doing what they do best - running their company.
Once a business is set up with a payroll management service, the only time investment on the owner’s part is submitting employee information, pay adjustments, and other changes; the service will take care of everything else.
Best Advice – Get Payroll Help!
The takeaway here is simple. Any business owner can try their hand at handling their own payroll services, but it is much more cost-effective in the long run to let a payroll company do it, instead.
The gain for doing this is more time to spend running the business with less time spent slowly working through specialized accounting tasks or even making mistakes.
Professional payroll services help companies be more profitable!