Running a small to medium sized enterprise is all about resource allocation.
Business owners are best off focusing on their mission rather than doing payroll or worrying about finding, retaining and managing an employee to do their payroll. Don’t get me wrong; Payroll is a critical piece when you have employees. They expect to be paid correctly and on time but it’s all about working on your business rather than in your business. Oh yeah, most people find it less expensive to hire a payroll service than hire an employee capable of accurately and reliably doing full cycle payroll tasks themselves.
#3 – Risk
Payroll is complicated even if you’re just located in one state. If you’re in a multi-state or multi-tax environment it gets even worse. Not paying taxes correctly and timely leads to penalties and increasing likelihood of audits. Nobody needs that. By using an outside partner to be responsible for timely tax filings you outsource that risk. You reduce the risk of “information leakage” inside your organization. You also won’t be “held hostage” by someone who believes they’re indispensable nor can you be at risk for one person having some tragic accident.
#2 – Employee Benefit and Convenience
Make no mistake, the Millennials are here! They expect direct deposit and they expect the ability to access information and take actions whenever they want wherever they are. This can include not just viewing their pay stub and direct deposit information but seeing time off balances, requesting time off, getting benefits information when they need it and checking work schedules as well.
Payroll companies are also already knowledgeable in how to handle benefit plans. Do you know the difference between Section 105 and 125 Plans? Do you know which states tax employer contributions to 401(k) and which ones don’t? The right payroll partner can and does!
#1 – Management Tools
Just as getting information into employee hands is the new standard, getting information into management’s hands is the new elevator to a higher performance level. On-the-go access through laptop and smartphone for historical data, time and attendance information, performance eval’s and earning history enable faster decision for teams. Access to custom-designed cost reports and job costing promotes a more thorough analysis and lessens “seat of the pants” planning. The old days of HR or Accounting as a central repository of information to which operations went on bended knee when they needed to know something are gone! By putting the right information in the hands of the right people when they need it, your organization becomes more agile and productive.
Jim Hutsipiller, PayNorthwest LLC