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

What I'm Reading

October 2014
Thursday, September 25, 2014

Nick Herinckx, CEO of Obility, and Jake Weatherly, CEO of SheerID, share what they've been reading.


Read more...

Revenge Forestry

November/December 2014
Tuesday, October 14, 2014
BY JONATHAN FROCHTZWAJG

A flare-up in the Elliott Forest raises questions about détente in Oregon’s timber wars.


Read more...

I Know How You Feel

November/December 2014
Wednesday, October 22, 2014
BY JESSICA RIDGWAY

Most smartphones come equipped with speech recognition systems like Siri or Cortana that are capable of understanding the human voice and putting words into actions. But what if smartphones could do more? What if smartphones could register feeling?


Read more...

True Blood

October 2014
Thursday, September 25, 2014
BY JOE ROJAS-BURKE

Antibiotics really aren’t magic bullets.


Read more...

Constant Contact

October 2014
Thursday, September 25, 2014
BY AMY MILSHTEIN

To prevent burnout, companies are banning email and after-hours communications. But is the 24-hour workday here to stay?


Read more...

What I'm Reading

November/December 2014
Wednesday, October 22, 2014

Peter Lizotte at ACME Business Solutions and Roger Busse at Pacific Continental Bank share their favorite reads.


Read more...

Two Sides of the Coin

Contributed Blogs
Friday, September 26, 2014
0926 iphone6-thumbBY JASON NORRIS | GUEST BLOGGER

This post focuses on the recent release of the new Apple iPhone as well as Alibaba's IPO, the largest U.S. IPO in history.


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