There’s one thing about hiring employees: As soon as you hire, you have to start paying them.
Seems pretty straightforward, right? One employee, one paycheck per pay period.
And that’s the thing: it is simple – on the surface.
But something many business owners don’t anticipate is the amount of detail-oriented admin work that payroll requires.
Ready? Let's dive in!
When you start to think about it, there’s actually a lot of things going on behind the scenes when it comes to payroll.
In addition to keeping track of employees’ hours and pay rates, you’ve got to sort out pay stubs, physically write checks (or put in orders for direct deposits), consider any paid leave or bonuses, handle all taxes, quarterly reporting and w-2 forms.
And beyond those things? There’s the issue of keeping your records in order. Keeping detailed records is essential to running a tight ship and being able to provide records of payment if you were ever served an audit.
There are software programs and strategies that can really help with keeping payroll up to date. For some business owners, just getting these systems in place is enough.
But for many business owners, payroll turns out to be an annoying task that sucks up time that could be better spent making sales, growing the company, or doing pretty much anything else.
Let’s say that managing payroll takes about two hours a week.
That doesn’t seem like a lot of time, but if you calculate what your time is worth (whether you’re landing contracts, meeting clients, or wrapping up a big project), those two hours can turn out to be pretty expensive when they all add up. That’s 8 hours every month – or an entire work day!
The good news is that payroll services are some of the most affordable services many accounting firms offer.
That’s definitely true for us. As an example, we have a business owner who pays $20 to run payroll every two weeks, plus the $3.50 charge per paycheck. This business owner has two employees. That totals only $27 every two weeks, which ends up being much less than the 2 hours per week the owner’s time and brainpower are worth.
After one of our payroll clients gives us the number of hours each employee has worked (or, if an employee is paid a set amount at each paycheck, info on any changes in their pay), we send employees their paychecks, handle all taxes, all reporting, records, and all w-2 forms.
Additionally, we handle reporting in the case that the Department of Labor did randomly audit you. We also keep all pay stubs available if an employee would ever request one from a previous pay period.
And, finally, one more big benefit of hiring your payroll out to a small accounting firm is the level of personal service you receive.
Each business has an accountant or tax preparer assigned to them in addition to an assigned payroll specialist. You’ll be working with a person who understands how your business’s payroll works month to month instead of a program or algorithm that responds to the numbers you punch in.
If you have employees, it's time to start looking at payroll services.
The time, brainpower, and money hiring out your payroll saves is likely well worth it. If you have questions, hit up your local accounting firm and find out their rates.
And if you're in the mid-Missouri area, come in to talk to an Accounting Plus payroll specialist. We'll help you find the smartest way to handle your payroll services. Give us a call today to set up a consultation.