Payroll Options for Small Businesses
When it comes to small businesses, there are numerous payroll options that can be employed. Let’s have a look at the different options available along with the advantages and disadvantages associated with each one of them.
1 – Do it Yourself
If you are cocksure of your mathematics prowess and are really into playing with numbers, then you can always manage the payroll yourself. If you own an enterprise with a couple of employees and you are not hampered by time constraints, then you can always use this option and save a few bucks up your sleeves. The issue here is that a number of business owners are not aware of the pain that comes with the payroll. After all, it is not about disbursement of the paycheck only. You will have to monitor federal W-2 forms which are required to be updated annually. Moreover, you also have to be cognizant of the advantages, process attendance records, and also be able to furnish financial reports as and when required. If you are acquainted with legislation related to wages and advanced accounting techniques, you may as well go down this path. But if you are not really into dealing with numbers, then you should read farther and go for the other options listed below. Managing the payroll yourself can be quite cumbersome if you are unorganized since if you end up losing vital information or have incorrect information, you will be left stranded with no way to support it.
2 – Go for an in-house setup
Small or medium sized enterprises with a hundred or more employees are typically tempted to hiring a professional to deal with the payroll. This creates either a full time position or someone from the HR team has to carry out the duties related to payroll in part-time basis. Scalability is the primary concern in such a configuration. It sounds a pretty good option if your business is likely to have a consistent number of employees for the coming few years. Having said that, if there is no assurance regarding the stability of a business with regard to its employees, then it is by no means not a good option to keep it in-house. If you still attempt to do so, you will have to hire, fire and train new employees frequently which can lead to wastage of financial and temporal resources.
3 – Bank on your software
Handy software and online tools similar to Paychex can be extremely helpful for in-house accountants and business owners as they provide a trustworthy way to save, cull and report on important information related to the payroll. Processes can be automated with the help of a software which lets the users to make only cosmetic changes and their work is done automatically. It is a wonderful way to keep your records organized and can be used in tandem with the other payroll options enlisted in this post. You can download a trial version of the software and check it out to ensure it is in accordance with your preferences and requirements.
4 – Outsource payroll duties
The most affordable option for small enterprises is to outsource the payroll responsibilities to a professional company. This can accomplished by using outsourced bookkeeping services. This will ensure that the business owner does not have to worry about the payroll and the seasoned bookkeepers deal with the assigned tasks. There can be several reasons for small enterprises to go down this route but there are plenty of business owners who get the following advantages by outsourcing payroll duties:
- Enhanced accuracy
- Savings in terms of cost
- Precise financial reporting
- Problem solving
- No need to train your employees again and again