Payroll management is a vital component of an organization’s relationship with its workers, but it’s no easy task. Human resource and payroll teams must be ahead of the continual regulation changes, updated forms, and the multiple local, state, and federal compliance layers. Moreover, internal staff changes, changing vendors, classification of independent contractors and employees, and other unexpected developments can impact the process.
With all these hurdles, most small business owners in Oklahoma aren’t confident with their payroll functions. But a reliable payroll service provider can come through for you.
Small Businesses Face Unique Payroll Hurdles
Small and medium-sized business owners face significant burdens. Most go into business to offer competitive services or products and keep clients happy. Furthermore, their bookkeepers primarily focus on handling other accounting tasks; hence less emphasis on the payroll process.
This could result in the following challenges:
- Leveraging manual payroll processing: Basic processing tools like spreadsheets seem affordable and adequate for small-sized businesses. But it’s error-prone and time-consuming, and the risks and complexity increase as you grow and recruit more talent.
- Staying ahead of changes in employment regulations: Laws change at every level, and you must always be ahead of any developments. Failing to notice changes and incorrect payroll calculations could lead to penalties or fines.
- Over- and under-payments: No one likes to be underpaid or forced to return an accidental overpayment. These errors are common for businesses that use manual systems and usually complicate W-2 processing and accounting.
- Privacy and confidentiality: Data breaches have grown in complexity and frequency. As small companies run payroll systems, they handle sensitive information like pay rates, social security and bank account numbers, or home addresses – all of which expose the organization to risk.
- Record keeping: Accurate records are crucial for the organization and compliance purposes. The Fair Labor Standards Act (FLSA) mandates keeping staff earning records for at least three years, but this is a challenge for small entities that still leverage manual processes.
- Misclassification: Even small entities can mix up part-time and full-time workers or independent contractors, which causes serious problems if it goes unnoticed.
- Tax non-compliance: Generally, it’s your company’s responsibility to correctly compute and withhold workers’ taxes. Employers withhold about 72% of all revenue collected by the Internal Revenue Service, and getting it wrong through manual errors has made many growing businesses clash with the agency.
- Unbalanced payroll costs: Small businesses are forced to do more with less when handling administrative costs like payroll. As such, most find it challenging to maintain or lower expenses.
- Payroll accuracy: Human error is a leading cause of payroll inaccuracies in many small businesses. This has left most of them with dissatisfaction among employees and compliance penalties.
- Payroll fraud: Activities like falsifying time cards by entering higher-paying shifts or excessive overtime are common in small businesses that haven’t invested in advanced payroll systems.
While these are common hurdles for most small businesses, you can get around them by leveraging reliable payroll solution providers within your location.
A Reputable Payroll Company Can Help
A lot is at stake for most small and medium-sized organizations, and one area you cannot afford to get wrong is your company’s payroll process. You’re going against established entities with robust human resource functions, and a small error in your payroll functions could be a significant setback.
Fortunately, payroll companies level the playfield, allowing even the youngest establishments to maintain robust payroll and HR systems. Here’s how you’ll benefit when you involve a reliable small business payroll company:
Potential Time Saved
Payroll processing demands attention to detail at the cost of valuable time you could otherwise use to address pressing priorities like serving clients or building revenue.
When you work with a reputable HR and payroll service provider, you’ll concentrate on what matters and enjoy different opportunities to maximize your time savings. Additional tasks like benefits administration or new hire reporting can be included in the outsourcing mix, boosting your time efficiency even more.
The constantly changing tax regulations make errors more prolific, but a payroll company will help you file federal and state payroll taxes. You’ll not struggle to comprehend the latest filing deadlines, tax codes, deposit requirements, payroll software, tax tables, or government forms.
Avoid Internal Revenue Service (IRS) Penalties
Numerous organizations pay heavy IRS penalties every year. On average, 40% of small entities pay $845 for delayed or incorrect filings, so you can’t take payroll mistakes lightly.
Professional service providers are abreast with every regulation affecting your company. They’ll manage your filing and calculations with the utmost precision and ease at a minimal cost. Apart from helping you avoid penalties, you’ll also save lots of labor hours.
Enhanced Security Posture
Payroll processing is pretty complex, entailing loads of risk monitoring because stolen personal data can cost your business. Your team may be trustworthy, but workers must monitor the risk surface extensively. The lack of solid cybersecurity measures gives threat actors opportunities to tamper with vital information and abstract funds.
Payroll service providers have avant-garde measures to secure your systems and data and monitor for threats around the clock without manual intervention. They also use advanced data protection and storage solutions that small businesses can’t have.
A payroll company relieves you from time-consuming manual processes. Your workers will be free to pursue crucial revenue generation and value-adding activities within their realm of expertise. In turn, you’ll have a more productive team, which translates into a higher bottom line.
No Infrastructure or Maintenance Costs
Maintaining an in-house payroll management team requires you to invest in paid software and address upgrade costs. But this can be time-consuming and takes up more resources. Outsourcing eliminates infrastructure and maintenance costs with ease and reduces the chances of incorrect filings.
A Leading Oklahoma City Small Business Payroll Company Is Ready to Help
Outdated payroll systems and practices can cost you immensely! But you should no longer worry about this, as you’re on the right site.
NetPEO offers the appropriate services to meet your HR and payroll needs, including:
- Brokerage services
- Workers compensation
- Employee leasing services
- Employer liability management
- Employee benefits
- Risk management
Contact us if you intend to advance your HR and payroll functions.