Sponsored by Lane Powell

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

Reader Input: Energy Overload

June 2015
Wednesday, July 15, 2015

We asked readers to weigh in on the fossil fuel-green energy equation.


Read more...

Greenpeace (temporarily) prevents Shell oil ship from leaving Portland

The Latest
Thursday, July 30, 2015
hangersBY JASON E. KAPLAN | STAFF PHOTOGRAPHER

Greenpeace activists suspended themselves from the St. John's Bridge in an attempt to prevent a ship from heading to the Arctic.


Read more...

Apartment Mania

Guest Blog
Thursday, June 18, 2015
4805983977 11466ce1d6 zBY BRAD HOULE | CFA

While most categories of commercial real estate have performed well, one of the most robust has been apartment buildings.


Read more...

Reader Input: Rx for Health Care

July/August 2015
Wednesday, July 15, 2015

We asked readers how Obamacare has impacted their business.


Read more...

Best Foot Forward

July/August 2015
Monday, July 13, 2015
BY CHRIS NOBLE

Whether you're stepping out to work or onto the track, Pacific Northwest shoe companies have you covered.


Read more...

Reader Input: Road Work

March 2015
Wednesday, July 15, 2015

Oregon's roads are crumbling, and revenues from state and local gas taxes are not sufficient to pay for improvements. We asked readers if the private sector should help fund transportation maintenance and repairs. Research partner CFM Strategic Communications conducted the poll of 366 readers in February.

0315 input01 620px

 

Reader comments:

"I feel private enterprises are capable of operating at a higher efficiency than state government."

"This has been used in Oregon since the mid-1800s. It is not a new financing method. This form of financing may help Oregon close its infrastructure deficit by leveraging funds."


Read more...

Fixing Oregon’s broken roads

The Latest
Tuesday, June 09, 2015
RUCCostComparison rev4-30BY KIM MOORE | RESEARCH EDITOR

The technology at the center of Oregon’s road usage fee reform.


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