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

Spreading the wealth

March 2014
Tuesday, February 25, 2014
HiResBY PAIGE PARKER

A money management firm broadens its reach. 


Read more...

Wheel man

March 2014
Tuesday, February 25, 2014
BY LINDA BAKER

Les Schwab has put a premium on customer service since 1952, when legendary namesake Les Schwab founded the company with one store in Prineville. (Schwab died in 2007.) But if the corporate principles remain essentially the same, the world around this iconic Oregon business has changed dramatically.


Read more...

Downtime with Ron Green

March 2014
Tuesday, February 25, 2014
BY JESSICA RIDGWAY

Ron Green became president and CEO of Oregon Pacific Bank in August 2013.


Read more...

How to handle the unexpected

Contributed Blogs
Friday, March 28, 2014
03.28.14 thumb disasterBY TOM COX | OB BLOGGER

The next mysterious (or disastrous) event could be one that you or your team might suddenly need to respond to, probably under intense scrutiny.


Read more...

The 2014 100 Best Companies to Work for in Oregon

News
Friday, February 28, 2014

100best14logo ThumbnailThe 21st annual 100 Best Companies to Work For in Oregon list was announced Thursday night at an awards dinner at the Oregon Convention Center.


Read more...

Closing the gap: Community colleges and workforce training

News
Thursday, March 27, 2014
03.27.14 thumb collegeBY MARY SPILDE | OP-ED CONTRIBUTOR

Community college career, technical and workforce programs present an opportunity to bring business and education together as never before.


Read more...

Leader's bookshelf

Contributed Blogs
Friday, March 14, 2014
02.06.14 BooksBY TOM COX | OB BLOGGER

Five books that will make you a better leader.


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