Sean Manning is CEO and Founder of Payroll Vault Franchising LLC, as well as a CPA, and Thought Leader in the Financial Field.
Payroll issues can plague a small business, causing headaches both for the owner and employees. No matter how organized or well-intentioned a business owner may be, operations overall can become overwhelming now and again, and the accounting and payroll duties behind the scenes can often be left to suffer.
From overseeing and personally handling aspects of operation ranging from customer service to inventory to simply keeping the lights on, an owner wears many hats — all to make a profit and have the cash flow to make payroll in the first place. The depth of one role is often taken for granted, and that is the job of administering payroll.
When an operator handles payroll alone or assigns the duty to a bookkeeper with limited resources, it can be surprisingly easy to have problems crop up, and opportunities for mistakes can be many. Consequences can include violating tax laws, having frustrated employees and creating extra work to remedy issues.
In my opinion, it can be a bad idea for an inexperienced owner, bookkeeper or CPA to manage the filing of payroll taxes, rather than put the onus on true payroll professionals. Ensuring the flow of payroll involves many moving parts, such as the payroll schedule, tracking employee hours, paying payroll taxes and more — including, at the moment, making sense of the Payroll Protection Plan Loans and Families First Coronavirus Response Act.
Finding The Right Fit
Too many small businesses rely on an owner, manager, bookkeeper or CPA to handle compliance-driven payroll duties. And even if a business has only a few employees, it can be risky and time-consuming if a mistake is made.
Business growth requires, well, attention to growth. A part-time payroll person can struggle to keep up with the payroll needs of the businesses and ultimately distract from its growth opportunities. A business can hire an in-house accountant and invest in an internal payroll system. Alternatively, businesses can contract with an outside, big brand payroll company.
For small businesses that prefer a more personalized payroll service that they can see, meet with and talk to, a local or boutique-style brand is ideal. Besides relying on a payroll service for updates about tax deductions, year-end documentation and compliance standards, when questions and issues arise, having experts within arm’s reach is indispensable and comforting.
Your employees aren’t faceless, and neither should your payroll provider be. Few aspects of business are more personal than when you pay your employees the money they have earned and by which they live, so it makes sense to have personal care on the payroll management side as well.
And, it’s better to find such a payroll service partner early than to wait for problems to happen. As the old saying goes, it’s easier and more economical to stay out of trouble than it is to get out of trouble.
Freedom To Focus
Payroll brands that are consultative can assist with time and attendance tracking. And they should offer a customizable timekeeping solution to reduce risk and overall labor costs. Efficiency in time management is critical in managing the number one cost to most businesses: labor.
A respected local payroll partner also should offer human resources services to take more employment-related tasks off the plate of a very hands-on owner focused on day-to-day operations and growth. Consider using a company that provides background check services, which is another way to hire better, reducing turnover, liability and risk.
A potential challenge for business owners focused on working on their business is dealing with workers’ compensation. Look for a payroll company that provides the benefits of pay-as-you-go workers’ compensation. This approach can eliminate premium deposits, improve overall cash flow and reduce exposure to audits.
Another legally mandated part of running a business that can be difficult for a small business to track is keeping up with the most current labor law posters. Your payroll services company should be able to manage this for the business and provide both federal and state posters that are-up-to-date and ready to display in-house and digitally for remote workers.
With a local dedicated payroll expert managing the minutiae of payroll and other tedious, detailed, compliance-driven tasks, the business owners can have more freedom to focus on bringing in revenue, supporting their operations and hopefully having increased profits.