Did you know that almost 40% of businesses worldwide outsource at least some of their payroll management?

If you own a small business with few employees, you may be able to handle payroll on your own. At least at first.

But what happens as your business grows and you add on more employees? Or what if you’re struggling to juggle paperwork while reopening your business after the pandemic?

In this post, we’ll explain how a payroll management service could be the answer you need.

What Is Payroll Management?

Payroll is more than just writing a check and jotting it down in your financial reports.

Federal law mandates that you track 20 different types of employment records for each of your employees. Depending on your state, you’ll need to keep these records for 4-6 years, even if you no longer employ the individual.

For most employers, the payroll process is tedious, repetitive, even annoying. This means it’s easy to make errors or overlook important details. There are also security concerns and legal compliance issues to consider.

Stages of the Payroll Process

Whether you pay weekly or monthly, payroll management requires meticulous planning. Calculating and recording income tax, unemployment tax, and social security is only the beginning.

At the start of each payroll period, you need to calculate not only taxes but also bonuses, leaves, or other benefits. These might include vacation pay, sick leave, or overtime hours.

The actual payroll processing stage includes:

• Gross pay
• Taxes
• Bonuses
• Deductions
• Verification of all data

For a handful of employees, you might be able to make these calculations on your own. But what happens as you hire more staff?

Proper payroll management not only eases organization but also saves you valuable time to use in other endeavors.

Options for Payroll Management

In the beginning, many small business owners can get away with a simple Excel spreadsheet. Although it is simple and cost-effective, it’s also prone to errors and hard to manage.

Other companies rely on payroll management software. These provide a template for the the employer to input worker details and relevant income data.

As mentioned at the outset, many other businesses hire a third-party payroll service provider to handle these tasks for them. For each payment cycle, the company sends out a current payment schedule to the payroll service for processing.

This reduces the employer’s time and effort, allowing them to focus on other aspects of running their business.

Does Your Business Need Payroll Services?

In the early phases of running your business, you might do just fine managing payroll on your own.

But as you’re realizing, payroll management becomes more difficult as you scale your business up. There are also more legal requirements and compliance issues to worry about.

For that reason, many business owners have decided to entrust their HR-related tasks to a payroll service provider. These services can also include worker’s compensation coverage and employee benefits management.

Does this sound like the solution you’ve been looking for? Visit our services page to learn more about PEOs and other alternatives to simplify the way you do business.