Small business owners are masters at juggling multiple tasks. But the most effective owners become acutely aware of which tasks should be undertaken in-house and which tasks are best outsourced. Of all the responsibilities to offload, payroll often makes the most sense. Whether you’re a business of 10 employees or 1,000 employees, there are many reasons to move payroll off your desk or out of the finance department.
Reduce Administrative Burden
Unlike some administrative tasks that may only need to be performed intermittently, processing payroll is a regularly occurring activity – typically every two weeks for most companies. And considering that payroll is more than just cutting a check for salary or hours worked, it also involves accounting for vacation and sick time, employee classification, wage and hour regulations, and payroll taxes (an onerous category of its own) The time spent on processing payroll can add up to weeks of labor annually, but fortunately there are professional payroll companies that can take care of it all, leaving you to focus on running and growing your business.
Peace of Mind
Your employees are the important asset of your business, so paying them accurately and on-time is paramount from both an ethical and a legal perspective. Outsourcing the process guarantees that payroll will be managed with 100 percent precision. Beyond the nuts and bolts of direct deposits and vacation time, payroll experts are familiar with the ever-changing tax and employment codes and regulations that vary from state to state, thus minimizing your risk of making a costly payroll misstep.
Tax Payments Done Right
Processing payroll tax returns and payments is a crucial part of a business’ operations. Having a third party fulfill those tasks means they’ll be fulfilled accurately, on-time and in a legally compliant manner. While payroll tax regulations vary by state, we are required to file quarterly in Massachusetts. Those deadlines in April, July, October and January are hard and fast, with steep penalties for delinquent filers.
More than Just Payroll
When you partner with a payroll provider, you’ll often get equipped with a whole suite of HR services, giving your internal HR team a huge value add. At The Coop, we work with Complete Payroll Solutions, whose offerings include an HR hotline for instant answers on all manner of topics, such as Covid-19 and paid family medical leave. They also offer help developing (and keeping updated) the all-important employee handbook. Handbooks can be cumbersome to compile and maintain but are essential and often the first thing a lawyer, judge or employee will revert back to when faced with an employment issue. One of the most popular services offered is a mobile time and attendance system, allowing employees to punch in and out directly from their smartphones. Industries with employees working outside of the office – like landscaping, construction and cleaning – have found this functionality beneficial and convenient.
The key to partnering with any third party, especially for important tasks involving sensitive data such as payroll, is to make sure it’s a reputable partner you can trust. As we often discuss in this column, your community banker is a tremendous resource for all manner of business services, payroll among them. If you’re ready to streamline your operations and explore working with a payroll provider, reach out to your banker or one of our Small Business Specialists to get started.
Allyson Brainson is a Vice President and Small Business Relationship Manager with The Cooperative Bank of Cape Cod.