Why should you outsource?

The IRS penalizes one in three business owners for payroll errors. The New Jersey Department of Revenue has a similar ratio of fines for business owners. The #1 reason you outsource your payroll to a professional payroll processing company is to comply with the IRS and the state of New Jersey.

Even if you’re not making mistakes in your internal payroll, you’re still wasting your most valuable asset, TIME. Time is the second reason why you should outsource your payroll company. Your time equals money for your business and even if you delegate the responsibility to a member of your staff, there are a few additional things to worry about. Your time doing payroll is money lost to your business. Not only do you have to pay your salary or rate of pay, but you also have to pay employer taxes, workers’ compensation, and employee benefits.

At worst, you’ve opened yourself up to potential fraud. Internal payroll fraud is more common in small businesses because there isn’t a high level of security with bank accounts, check access, signature stamps, social security numbers, addresses, and other personal information. All of this gives you my third reason, which is to have the peace of mind that comes from knowing that your employees are paid and taxes are filed accurately and on time.

So how do we choose a payroll service company?

When choosing a payroll company, there are 5 things to know.

1. Financial Protection – Ask your payroll company to provide proof that they are insured and bonded. You want to know if your payroll company makes a mistake, that they are responsible for correcting their mistakes.

2. Backup and Disaster Recovery Strategy: Ask your payroll company what their backup plan is if some type of disaster were to occur (example: fire, flood, computer virus, and power and phone failures). Where is your information backed up and stored? How quickly can they be back up and running if a disaster strikes?

3. Customer Service: The person running your payroll is more important than the person selling it to you. Ask who will handle your payroll. Remember that a salesperson’s job is to sell you, and they are very well trained to do it! You should ask to speak with the specialist you will be working with to see if they like them and their level of experience in the industry. Ask for any references from clients you are currently working with. Find out if your temporary or permanent specialist? Some of the largest payroll companies are data processors and call centers. Ask yourself if that is the type of service you want. You should feel comfortable and confident that if a problem occurs, your specialist can fix it quickly.

4. Pricing – The payroll industry has changed dramatically over the years from letter to package pricing. Most payroll companies bundle all of their services together to offer you one rate per pay period based on the number of employees you have and their pay frequency. There are additional fees for delivery, year-end processing, and W2 forms as well. Since the payroll industry has become very competitive, be sure to ask your salesperson if there is a discount and when it runs out.

Some of the largest national franchise and payroll providers have introductory rates, special offers and free months. Buy Beware! These specials end and discounts disappear and annual increases occur. Remember you are being sold by a highly trained salesperson who gets paid if you handle your payroll, not if you stay. Ask them to put it in writing and via email to protect yourself, and if you really want to get creative, ask your direct manager or boss to sign off on the proposal as well.

5. Employer and Employee Benefits System Integration: Most payroll companies can offer additional services such as online employee access, pay-as-you-go workers’ compensation, 401k, HR solutions, health insurance, and payroll solutions. of time and attendance. When choosing your payroll provider, be sure to choose a company that can grow with your business.

Follow these 5 easy steps when choosing your payroll company and you will save your company time and money!