Home Archives November 2006 Systems management: Making payroll time pay off

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

OB Poll: Wineries and groceries

News
Friday, October 24, 2014

24-winethumbA majority of respondents agreed: Local vineyards should remain Oregon-owned and quality is the most important factor when determining where to eat or buy groceries.


Read more...

Molecular Movies

September 2014
Wednesday, August 27, 2014
BY LINDA BAKER

Dr. Chong Fang isn’t God. But the assistant professor of chemistry at Oregon State University is getting closer to figuring out how he put everything together. 


Read more...

Powerlist: Colleges and Universities

September 2014
Wednesday, August 27, 2014
BY KIM MOORE

A conversation about higher education with the presidents of the University of Oregon and Clackamas Community College, followed by September's powerlist.


Read more...

Knight Vision

October 2014
Thursday, September 25, 2014
BY VIVIAN MCINERNY

Travis Knight wants to release a movie a year. Can he pull it off?


Read more...

Podcast: Testing for Emotional Intelligence with John Hersey

Contributed Blogs
Friday, September 19, 2014
ivbU3sIXBY TOM COX | OB BLOGGER

How can you tell if you, a peer, a subordinate or a job candidate has the emotional intelligence needed to do well?


Read more...

Back to School

September 2014
Wednesday, August 27, 2014
BY LEE VAN DER VOO

By now we’ve all read the headlines: Starbucks is giving away free degrees. Except it isn’t.


Read more...

Fork & Bottle

October 2014
Thursday, September 25, 2014

National media can’t get enough of Oregon’s pinot noir, artisan-food purveyors and lively, independent film scene.


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