Sponsored by Oregon Business

Systems management: Making payroll time pay off

| Print |  Email
Wednesday, November 01, 2006

For most people in America, payday is a happy affair. But for millions of the nation’s small-business owners, it’s a complex administrative chore that eats valuable time.

According to a new study by the National Federation of Independent Business (NFIB), America’s largest small-business group, nearly two-thirds of small employers still prepare payroll in-house. Businesses with fewer than 20 employees are most likely to do payroll themselves, but half of small firms with 20 or more employees also do payroll in-house.

Usually the task falls to the owner, while some assign it to an employee and a few pass it to an unpaid spouse or family member. Of business owners who do their own payroll, only 62% use spreadsheet software, and about one-third run payroll through their regular accounting software (such as QuickBooks).

Some say they do it themselves because that’s the cheapest method. Others say they want to control the process.

But how much is your time worth? And what could you or others be doing with that time to help grow the business? Doing payroll yourself to stay in control is like typing letters on a typewriter so you don’t give up control to a computer with word processing software.

A payroll service acts only on your orders and information. You still control everything about it. If hands-on is a must, there are online payroll services that let you manage the process yourself.

Processing payroll correctly requires that you meet a long list of tax, insurance and legal requirements. And if your business offers any benefits that involve payroll deductions or accounting issues — like health insurance or a retirement plan of some type — that’s another reason to switch.

Bottom line: Payroll is a task fraught with dangerous red tape and hidden costs and a single misstep can cost you dearly.

Outside payroll processing services are a good option. First off, no business is too small to use one; most will handle as little as a single employee. With services easily accessible online, you’d be a bit daft not to at least consider the option. Here are some things you should know:

  1. Payroll services are highly competitive. Basic processing typically costs between $2 and $3 per check, plus a base fee.

  2. Expect small additional fees for account setup, adding or dropping employees and changing information.

  3. For a complete solution, expect to pay $3 to $5 per paycheck issued.

  4. Without proper knowledge of payroll tax rules and procedures, it is easy to make mistakes. For that reason alone, many small businesses use an outside service.

  5. Each pay period, you may still need to submit payroll data to the service, via phone, fax or online. Even if salaries are fixed, your approval is needed to make payments.

— Daniel Kehrer, editor, www.work.com
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
 

More Articles

Tweeting Portland's State of the City address

News
Friday, January 30, 2015
Screen Shot 2015-01-30 at 3.08.19 PMBY JACOB PALMER | OB DIGITAL NEWS EDITOR

For those who were working, here are a few highlights of Charlie Hales' State of the City address.


Read more...

Car Talk

April 2015
Thursday, March 26, 2015
BY LINDA BAKER

Everyone knows cell phones and driving are a lethal combination. The risk is especially high for teenage drivers, whose delusions of immortality pose such a threat to us all. Enforcement alas, remains feeble; more promising are pedagogical approaches aimed at getting people to focus on the road, not their devices.


Read more...

6 chiefs of staff dish on their bosses

The Latest
Thursday, February 05, 2015
legilistiblog-thumbBY JACOB PALMER | OB DIGITAL NEWS EDITOR

We ask chiefs of staff for the scoop on Oregon legislators.


Read more...

Photos from the 100 Best Companies to Work For in Oregon awards celebration

The Latest
Friday, February 27, 2015
IMG 9975cneditPHOTOS BY JASON E. KAPLAN

Images from the 2015 celebration of Oregon's great workplaces.


Read more...

Get on the bus!

April 2015
Thursday, March 19, 2015
BY APRIL STREETER

How the private sector can ride the next transit revolution.


Read more...

Are wolves good for business?

Contributed Blogs
Friday, March 06, 2015
030615-wolf-thumbBY JEFF DELKIN | OP-ED CONTRIBUTOR

As a local business owner, I believe it’s important to build our economy on a platform of conservation values.  


Read more...

Umbrella Revolution

March 2015
Monday, February 23, 2015

Yeah, we know: Oregonians are way too cool for umbrellas. But today’s stylish, high-tech models will soften the resistance of the most rain hardened.


Read more...
Oregon Business magazinetitle-sponsored-links-02
SPONSORED LINKS