Advantages And Disadvantages Of A Payroll Service

Accurate and correct payroll is very important to your employees and important to you as a business owner. Payroll is more than just sending out paychecks every two weeks. You need to comply with and make sure you pay all of the federal, state and local taxes that are tied to having employees. A payroll service will handle the details and keep you out of trouble with the taxman; however, such a service does have some drawbacks.

Control vs. Outsourcing

The decision to use a payroll service could be a personal choice dictated by how much control you want to have over the different aspects of you company. If you keep payroll in-house, it is easy to make changes and answer questions concerning the pay information of your employees. The decision to use a payroll service means giving up some control of that portion of your business. However, payroll is primarily a repetitive operation, so letting someone else handle the details can free up time for more productive tasks.

Costs

A payroll service adds another cost to your budget. If you are a small business with few employees on a tight budget, paying for the service may not fit into the budget. The cost of a payroll service for a small business will be proportionately larger than for a bigger business. You need to compare the cost of the service to the time required to complete the payroll in-house and what that time would be worth doing other work.

Access to Data

Using a payroll service means your employee pay data will be on some other company’s computer system. This may be an issue if you need to make a change or if an employee has a problem with her paycheck. How much the fact that pay information is not kept in your business depends on how much access the service provides. You may want to compare services with this requirement in mind as well as comparing costs.

Compliance

Possibly the biggest benefit of using a payroll service is that the service will keep your business compliant with payroll tax laws and changes. While you are an expert at your business, unless your business is a CPA firm, you probably don’t have the time to become a payroll tax expert. The payroll companies can determine what taxes need to be withheld from employees, what you need to pay and send in the money to the correct agencies.

Source: smallbusiness.chron.com

If you have any questions, do not hesitate to contact our Payroll service.