Running a small business with limited resources can feel like you’re carrying the weight of the whole world on your shoulders. Whether you’re the founder or manager, you have to wear many hats and juggle many aspects of operating a business.
However, if you’re a Baton Rouge business, you can put down some of that burden by outsourcing your payroll. NetPEO, a small business payroll company with branches in Baton Rouge, has developed close relationships with small businesses in the Red Stick and greater Louisiana area.
What Does Payroll Outsourcing Mean?
Outsourcing is when you hire an outside company to handle business duties such as payroll. As you know, payroll is much more than paying your employees—it also requires a lot of paperwork including benefits management, taxation, and compliance.
There are two levels of payroll outsourcing. Depending on the level of third-party involvement you may deal with one or both of these levels. You can either outsource payroll administration only or enter into a co-employment agreement with a Professional Employer Organization (PEO).
Outsource Your Payroll Functions
You can choose to outsource some payroll functions and paperwork such as administration and compliance. In this type of agreement, you will still be responsible for withholding taxes, employee management, and other HR duties.
This hybrid model in which some functions are performed internally and the rest externally is also known as payroll co-sourcing.
Depending on your payroll needs, you can outsource additional payroll duties to an accountancy firm or a specialist payroll outsourcing provider.
Outsourcing Payroll Through a Professional Employer Organization
You can also choose to enter into a co-employment relationship with a PEO. If that is your choice, take comfort in the fact that they handle the entire payroll process. The PEO pays employees, administers benefits, submits employment tax, fills out compliance paperwork, and makes tax withholding payments on your behalf.
All this is possible because, in the eyes of the law, a PEO is regarded as a “third-party payer”. Your contract will define what the PEO can and can’t do, so you still remain in charge of the situation.
In co-employment, both the payroll and human resources department become the responsibility of the PEO. They can also handle other duties such as recruitment, onboarding, employee training, drug testing, and more.
Benefits of Outsourcing Your Payroll as a Small Business
Whichever type of payroll outsourcing you choose, there are many benefits of using a small business payroll company like NetPEO.
Save Time for Growing Your Business
Despite being a core business task, payroll is one of the business functions that waste resources. Without a dedicated HR or accounts department, many businesses nominate ad-hoc HR representatives to handle payroll and HR for the business.
In either case, outsourcing your payroll functions will save you effort, time, and money when it comes to payroll administration. Both you and your team will be able to focus on productivity, innovation, and growing your business.
Access to Payroll and HR Experts
Whether you outsource your payroll to a specialized payroll services provider or to a PEO, the people handling your payroll are going to be highly experienced and trained experts.
In addition to expertise, you also benefit from the technology the provider will use. These technologies help streamline the payroll process. Your employees will benefit greatly from the expertise and efficiency of such a team.
Increased Regulatory Compliance
Even here in Baton Rouge, one of the biggest challenges small businesses face is regulatory compliance. Compliance issues include labor laws, withholding taxes, immigration, workers’ comp, anti-discrimination, insurance laws, and many others.
Without the right expertise, your small business risks missing certain aspects of some of the more complex laws and regulations. Delegating this task to a knowledgeable team helps you to avoid penalties, reduce exposure to lawsuits, and prevent unnecessary audits.
Potential Cost Savings
Payroll administration is expensive. If you are a growing business, there will be a point when you will need to hire dedicated HR personnel. Additionally, investments in computers, software, training, recruitment, and operational costs all make in-house payroll quite costly.
Outsourcing payroll and other HR functions helps to reduce costs. According to the National Association of Professional Employer Organizations (NAPEO), these cost savings can amount to $450 per employee.
At NetPEO, we charge Baton Rouge small businesses a percentage of their gross payroll costs as our fee. They can also choose a flat rate per employee per year, which is often $900–$1,500 depending on the scope of services you require.
Should You Consider Hiring a Payroll Company?
Does it make sense to outsource a payroll company? The answer depends on your business situation. Here are some tips provided by the US Chamber of Commerce for your consideration:
- Are you having payroll challenges such as penalties from lack of tax compliance?
- Is your current process consuming too much time and too many resources?
- What is the state of your compliance? Some of the biggest challenges include paid time off (PTO), sick leave, workers’ comp, employee benefits, and tax reporting.
- Could your employees benefit from an improved experience? Professional payroll companies deliver convenient and accessible HR services, which could improve morale and productivity.
- As your business grows, does your payroll and HR department scale with it? If you are growing across borders, consider a national PEO such as NetPEO to help you scale.
Once you have assessed your small business’ needs, you can evaluate whether outsourcing payroll services is right for you. Better still, why not chat with us about it during our free consultation?
Disadvantages of Outsourcing Your Payroll
There are few but significant disadvantages to outsourced payroll. The biggest concern is loss of control and privacy. However, if you work with a reputable payroll services provider, you will have just as much, if not more data privacy and security.
Two other disadvantages include loss of company culture and issues with integration. This is a big concern with co-employment agreements, but the best payroll service providers will have a smooth transition for data access, employee experience, and payroll costs.
Why Work with NetPEO for Small Business Payroll Services?
As a small business operating in Baton Rouge, hiring a local small business payroll company will be a big step for you. You get to work with people who have lived and worked in the area, know the laws, and can provide personalized service to you.
NetPEO is the premier payroll company in Baton Rouge, across the state, and even in the country. Our size adds to the benefits you get including lower fees and access to better collective employee benefit schemes.
Get Outsourced Payroll Services in Baton Rouge
As a Baton Rouge payroll and HR services provider, we offer both a la carte services such as payroll, as well as complete co-employment solutions. We’re glad to answer any questions you have about our services in a free consultation.
Talk to us today to rediscover your freedom, time, and vision in business.