With the current state of the economy, it’s no wonder that small businesses are looking for ways to cut costs. One area that is often overlooked is payroll.
While it may seem like a good idea to outsource your payroll to save money, there are a few things you need to keep in mind first. Here are four things small businesses should know before investing in payroll services:
- Make sure you understand the fees involved. There is usually a base fee plus a per-employee fee.
- Payroll services are not created equal. Some offer more features than others, so be sure to compare services before making a decision.
- Check references and reviews before hiring a service. You want to be sure you’re working with a reputable company.
- Have a backup plan in place in case something goes wrong with your payroll service. This could include having someone in-house who can handle payroll manually or using a different service
Defining your business needs
Before making any decisions about which payroll solution is right for your small business, it’s important to first understand your specific needs. To get started, answer the following questions:
- How many employees do you have?
- Do you have employees in multiple states?
- Do you have employees with different pay rates?
- Do you have employees with different pay periods?
- Do you need to track employee time worked?
- How often do you run payroll?
- Do you need to offer direct deposit?
- What types of reports do you need?
Researching your options
There are many different types of payroll software on the market. As a small business owner, it is important to research your options and find the one that best suits your needs.
One of the most important factors to consider when choosing payroll software is whether it will integrate with your existing accounting software. This is important because it will make your life a lot easier if you are able to run both programs from the same interface.
Another important factor to consider is whether the software offers direct deposit. This is a great perk for employees because it allows them to receive their paycheck funds faster.
Lastly, you will want to consider the customer support that is offered by the payroll software company. This is important because you want to be able to reach someone if you have any questions or problems.
Considering the costs
Before investing in a payroll system for your small business, it’s important to consider the costs. There are two types of costs associated with payroll systems: direct and indirect. Direct costs are those that are necessary to purchase and maintain the system, such as software, hardware, and support costs. Indirect costs are those associated with using the system, such as employee training and data entry.
There are several factors that will affect the cost of your payroll system, including the number of employees you have, how often you run payroll, and the features you need. In most cases, the annual cost of a payroll system will range from $500 to $5,000.
Evaluating the features
In order to invest in the best payroll system for your small business, you’ll need to evaluate the features that are most important to you and your company. Do you need a system that can handle payroll for multiple states? Do you need a system that integrates with your accounting software? Do you need a system that offers direct deposit?
Once you’ve determined what features are most important to you, research the different payroll providers and compare the features they offer. Be sure to read reviews from other small business owners to get an idea of the customer service and support each provider offers.
Switching payroll providers can be a big undertaking, so be sure to choose a provider that you feel confident in.
Checking the reviews
It is extremely important for small businesses to do their research before selecting a payroll company. Many reviews are available online from a variety of sources, and these can provide invaluable insights into a company’s strengths and weaknesses. Checking the Better Business Bureau’s website is also a good way to see how many complaints have been filed against a payroll company, and how the company has responded to them.
Getting advice from experts
When it comes time to invest in payroll processing for your small business, there are a lot of things to keep in mind. You want to make sure that you’re getting the best deal possible, and that you’re getting a service that will be able to handle your specific needs.
One of the best things that you can do is to get advice from experts. These are people who have been in the business for a long time and know all of the ins and outs of payroll processing. They can help you understand all of the different options that are out there, and they can help you find the one that’s going to be the best fit for your business.
Oftentimes, experts will also be able to offer you discounts on payroll processing services. This is because they have relationships with different providers and can often get you a better rate than you would be able to get on your own.
If you’re not sure where to start when it comes to finding experts, one place that you can look is online. There are many websites that offer free advice from experts, and you can usually find a wealth of information by doing a simple search. Another option is to ask around among your friends or colleagues who might have experience with payroll processing.
Consulting with your accountant
The first step in investing in payroll is to consult with your accountant. You need to make sure that you are choosing a payroll system that is compatible with your accounting software. You also need to make sure that you are choosing a system that will meet your specific needs. There are many different payroll systems on the market, so it is important to do your research before making a decision.
Your accountant will also be able to help you determine how much you should be spending on the payroll. There are many different factors that go into this decision, including the number of employees you have and the complexity of your payroll system. You should never try to save money by skimping on payroll, as this can lead to big problems down the road.
Making a decision
There are a lot of things to consider when you’re thinking about investing in payroll services for your small business. Here are a few of the key things to keep in mind:
- The size of your business: If you have a very small business with only a handful of employees, it might not make sense to invest in payroll services. You can probably handle payroll yourself or with the help of bookkeeping or accounting software. On the other hand, if you have a larger business with multiple employees, it might be worth considering payroll services to save yourself some time and headaches.
- The complexity of your business: Another thing to consider is how complex your business is. If you have a lot of employees with different hours, pay rates, and deductions, it can be challenging to keep track of everything and ensure that everyone gets paid correctly. In this case, it might be worth paying for someone else to handle payroll for you.
- The cost: Of course, you’ll also want to consider the cost when deciding whether or not to invest in payroll services. Payroll services can vary widely in price, so it’s important to compare different options and find something that fits your budget.