Entrepreneurial Money Management

Marci talks about the financial issues & concerns business owners’ face when running their own company.

Let's Talk About Outsourcing Payroll

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Are you doing payroll yourself?  Why put yourself through that every two weeks?  

Payroll companies might sound like a luxury to the DIY payroller in you, but I'm going to say they're necessary.

Not only do you need to manage your time better for these reasons, you also need to think about offloading the liability of payroll errors onto a company that is equipped to deal with it.  

The IRS itself has begun certifying payroll companies to stay in compliance with their ever-changing regulations. Visit their payroll providers list here

Outsourcing payroll is especially important if your company sounds like this:

- There are frequent changes to payroll due to hourly salaries

- You have trouble tracking and reconciling changes in personnel, deadlines, and tax requirements on an on-going basis

- You often worry about what would happen if your internal payroll person quits

- No one is really sure how City tax withholding works

- You want to start compensating employees via increased benefits and aren't sure how to reflect that in your payroll 

Please don't think that outsourced payroll is you pampering yourself. In the long run, it stabilizes your liability and streamlines the entire process. I've outsourced payroll for companies with as few as two employees before, simply because the CEO was not equipped to manage it. And, the price tag for payroll has now dropped low enough that the cost justification is nearly instant.  

But don't take my word for it, read this HR World article about the top 10 reasons to outsource payroll. Most of the pros agree that it just makes sense.  

What are your thoughts on outsourcing payroll--was it worth it for you?  

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  • I couldn’t agree more! I own a small restaurant in a small town in Michigan and I did my own payroll for a few years. Overtime trying to keep up with the ever changing tax laws and due dates was too time consuming and I ended up getting some penalties from the IRS. I always thought only major operations used a payroll service, but then my CPA got me in touch with Paychex. I was a little worried about the “extra” cost at first, but after learning about the services they offer, I’m actually saving money year over year by using Paychex.

    The best part is, there’s no contract with them, so if you’re unsure, I would at least try it and see how you like it! I will never do my own payroll again.

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