Payroll May Be Costing Your Business Big Time

No matter what type of business you own, whether it’s a marketing agency, contracting company or tech startup, there’s one common challenge that everyone faces: payroll. Many business owners decide to handle this process on their own, which can be a money-saving tactic, but if not properly handled it can procure harsh consequences. If you decide to operate this process internally, it’s crucial to have an organized system in place. By doing so you can protect your company from IRS penalties and ensure your employees are paid on time. Whichever you decide, handling payroll internally or outsourcing the process, there are several things to keep in mind in.

Know your state’s employment laws. One of the biggest mistakes business owners can make is not being familiar with the employment laws for the states in which they operate. Following these laws are important and violating them can result in thousands of dollars in fines – which can be detrimental to most small businesses. Each state is different and knowing the specific nuances to each state can save you headaches and lots of money in the long run.

Pay early and often. You should always try to make a federal tax deposit for payroll taxes each time they are issued. This way, the money that must go toward the payroll taxes is applied correctly. There are no penalties with the IRS for depositing your payroll taxes too frequently, however there are large penalties for depositing late. Also, if payroll taxes are paid when employees are paid then you won’t be tempted to use that money for other business expenses.

PREMIUM CONENT: 2014 Contractor Payrolling and IC Evaluation & Compliance Landscape

Keep a running profit and loss statement. Having an accurate and up-to-date profit and loss statement will provide a good idea of the business’ monthly profit. This can be very important in accounting for any current taxes the business owes and can also bring the owner’s attention to expenses that may be unnecessary.

Outsourcing the process. If you decide payroll isn’t something you want to risk handling on your own, that’s perfectly normal. It’s a complex process that most business owners do not have the time to become experts on – that’s why there are companies specifically specialized in payroll processing. There are a few signs that will indicate it’s time to outsource: other processes are slowing down, no clear understanding of employee compliance, too many mistakes are being made, and losing sight of core competencies. If your business is falling short in any of these categories, it’s probably time to consider outsourcing.

When choosing payroll software for your company, make sure you ask the right questions.

  • How long have you been in business?
  • How will you handle my business as my company grows?
  • What are your fees and contract policies? Do you have other clients in my industry?
  • How important will my business be to your company?
  • Can you integrate with my employee benefits offerings?
  • How can I monitor and track all of my payroll transactions with you?

By doing this, you can potentially save money and time in the long run, reduce your chance of error and allow yourself more time to focus on the core competencies of your business.

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One Response to “Payroll May Be Costing Your Business Big Time”

  1. David Stemm says:

    “The court finds Kautzman’s testimony was not credible that she had resolved the problem Friday morning, given that Sepsey was still waiting for the contract and letter from TMS.”
    What may be likely to cost you your business is doing business with TempWorks. When the President & CEO, COO and Executive VP are all willing to lie under oath that is an apt indication of the fundamental dishonesty that permeates this organization.
    How many companies, at present, are actively litigating against your organization, Ms. Kautzman? Either TempWorks has the worst luck in the history of staffing or you do business in a manner that leads companies to seek remedy against you through the courts.
    By your President & CEO’s own admission, you have a 10% success rate helping start-ups. I’m betting that doesn’t make the marketing material.
    If you value your business and don’t want to be one of the dozens of people who contact me with horror stories about doing business with TempWorks, you would be wise to stay away from this company.

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