by Eli Bohemond, PrimePay
Nothing makes a business owner cringe more than a discussion about payroll processing.
In its 2012 Annual Taxation Survey, the National Small Business Association (NSBA) found that payroll taxes rank as a top financial and administrative burden to business owners. So it is certainly no surprise that business owners are constantly seeking out ways to remove themselves from that necessary, but unpleasant responsibility.
Myth #1: The business is too small to outsource payroll.
Whether a business has one employee or 100, the employer is still responsible as the business owner to file and compensate payroll taxes. This requires complete compliance around the ever-shifting rules, regulations and timing requirements for how payroll tax is calculated and paid. Employers are also required to ensure they’re complying with all the federal, state and, in many cases, local municipalities’ payroll tax laws.
Myth #2: Small businesses can’t afford to outsource payroll.
According to the 2012 NSBA survey, the average business owner spends eight hours each month on payroll administration. This adds up to a total of nearly 100 hours per year.
A 2012 study conducted by Business News Daily found that business owners highly value their time — no surprise there. One-third of business owners felt their time was worth $100 per hour and one-fourth felt it was worth at least $500 per hour. It costs a typical business owner $10,102 per year just for payroll processing.
The good news: With hundreds of payroll providers nationally, all focused on providing services to small businesses, the cost of outsourcing payroll, payroll tax filing and payments may only cost around $100 per month. Of course, this number is contingent on several factors, such as employee volume, pay frequency and other variables based on services needed.
Myth #3: Every payroll provider is the same.
Not all providers are created equal. While many offer similar products and services, a business owner should take the time to highlight the differences. Not only must they know what to look for, but they should know what questions to ask a prospective payroll company. Here are seven ways to find the right company:
The path to the best price is paved by inquiry.
Today’s employees expect more from their employers, and they have grown accustomed to evaluating their current employer against other employers based on ramped-up offerings. Employees are constantly assessing the employee-employer value relationship; that is, what each side actually receives versus what is actually provided. The moment this relationship goes off kilter, the employee takes the reins and starts exploring other options to restore that balance they demand.
Myth #6: Payroll is just never going to be easy.
Payroll is one of the most time-consuming, complex and legal-laden functions a business owner handles. According to the U.S. Department of Labor, there are more than 180 federal laws covering more than 10 million businesses and 125 million workers.
By using a reliable payroll provider, business owners can breathe easy knowing that a payroll company’s systems, processes, access to information and active involvement with lawmakers simplify the payroll process by taking the headaches and burdens off of employer’s head and shoulders.
Nothing makes a business owner cringe more than a discussion about payroll processing.
In its 2012 Annual Taxation Survey, the National Small Business Association (NSBA) found that payroll taxes rank as a top financial and administrative burden to business owners. So it is certainly no surprise that business owners are constantly seeking out ways to remove themselves from that necessary, but unpleasant responsibility.
Myth #1: The business is too small to outsource payroll.
Whether a business has one employee or 100, the employer is still responsible as the business owner to file and compensate payroll taxes. This requires complete compliance around the ever-shifting rules, regulations and timing requirements for how payroll tax is calculated and paid. Employers are also required to ensure they’re complying with all the federal, state and, in many cases, local municipalities’ payroll tax laws.
Myth #2: Small businesses can’t afford to outsource payroll.
According to the 2012 NSBA survey, the average business owner spends eight hours each month on payroll administration. This adds up to a total of nearly 100 hours per year.
A 2012 study conducted by Business News Daily found that business owners highly value their time — no surprise there. One-third of business owners felt their time was worth $100 per hour and one-fourth felt it was worth at least $500 per hour. It costs a typical business owner $10,102 per year just for payroll processing.
The good news: With hundreds of payroll providers nationally, all focused on providing services to small businesses, the cost of outsourcing payroll, payroll tax filing and payments may only cost around $100 per month. Of course, this number is contingent on several factors, such as employee volume, pay frequency and other variables based on services needed.
Myth #3: Every payroll provider is the same.
Not all providers are created equal. While many offer similar products and services, a business owner should take the time to highlight the differences. Not only must they know what to look for, but they should know what questions to ask a prospective payroll company. Here are seven ways to find the right company:
- Ask a trusted advisor.
- Browse their website.
- Get a sense of capability and credibility.
- Scope out LinkedIn.
- Explore the value they offer, besides cost-based services.
- Research the management team.
- Examine the testimonials.
The path to the best price is paved by inquiry.
- Do they offer any discounts? Ask about any association or affinity-group discounts that may be available to the business. Is the company part of a restaurant association or franchise system? What bank does the business use? Oftentimes, payroll providers have relationships with organizations like these and provide preferred pricing for members or customers of these organizations.
- What about incentives? Ask if the payroll company offers an incentive for clients who refer new clients to the company. Many payroll providers offer free or discounted services to loyal clients who bring them new business.
- Just ask for it. Companies shouldn’t be afraid to simply ask for a better price. Also, if a discount is not granted, they should consider asking for a free service. It’s possible to negotiate a free month or two of service, which equates to 10 to 20 percent savings over the year.
Today’s employees expect more from their employers, and they have grown accustomed to evaluating their current employer against other employers based on ramped-up offerings. Employees are constantly assessing the employee-employer value relationship; that is, what each side actually receives versus what is actually provided. The moment this relationship goes off kilter, the employee takes the reins and starts exploring other options to restore that balance they demand.
Myth #6: Payroll is just never going to be easy.
Payroll is one of the most time-consuming, complex and legal-laden functions a business owner handles. According to the U.S. Department of Labor, there are more than 180 federal laws covering more than 10 million businesses and 125 million workers.
By using a reliable payroll provider, business owners can breathe easy knowing that a payroll company’s systems, processes, access to information and active involvement with lawmakers simplify the payroll process by taking the headaches and burdens off of employer’s head and shoulders.
RSS Feed
