When starting or maintaining a small business, how one approaches the payroll process can either make a business thrive or hold it back. Many small businesses choose to handle payroll manually in-house; however, depending upon an already busy HR department with a task as significant as payroll can lead to costly errors.
Fortunately, online payroll can drastically change your work environment for the better. With the right amount of research and ample commitment, the headache that comes with the archaic pen-and-paper method of keeping track of your employees’ timecards can be left in the past. Online payroll is a vital step for any business, whether it has 10 or 10,000 employees. Here is how it works:
Avoid Costly Mistakes
If you are a business owner, then you know that mistakes made during the payroll process can easily cost you, potentially consuming the bulk of your budget. Most likely, it already has. The most common mistakes include misclassifying employees, missing deadlines and miscalculations.
According to the IRS, approximately 33% of employers make payroll errors costing them billions of dollars annually in penalties. Additionally, 40% of small businesses are responsible for $845 a year in IRS penalties as a result of mismanaged payrolls.
On top of that, the Wage and Hour Division of the United States Department of Labor reported $322 million recovered in back wages from non-compliant employers dealing with wage and hour laws in 2019.
With small business online payroll, the chance of mistakes is almost minimal. Additionally, more of your time will be available for other tasks more relevant to growing your business.
Focus on What’s Important
Small businesses are driven by passion and an idea that will make lives better. That is what small business owners should be focusing on. Not payroll.
On average, 40% of employers spend 80 hours or more on tax preparation each year, according to the SCORE Association. The average small business owner also spends over $1,000 on this process. While this amount might not seem enormous on the surface, it quickly adds up.
You also want to make sure that your employees are happy. Employees are not likely to feel loyal to a company that frequently delivers their paychecks late or calculates incorrect amounts. In fact, they may feel compelled to seek employment opportunities elsewhere.
By taking payroll on by yourself, you are subjecting your workers to payroll errors, which 54% of employees report annually.
After experiencing just two problems with their paychecks, 49% of U.S. workers will leave a job, according to a survey by The Workforce Institute at Kronos Incorporated.
By leaving behind your old methods and utilizing online payroll services, small businesses have the chance to focus on what matters most.
Lucky for you and your small business, there is an abundant amount of online payroll services available. All you need to know is what your business’s individual needs are and how you can meet them while also staying true to your budget.
Fortunately, the cost of the average payroll service per month is notably cheap. Therefore, employing online payroll services is the smart, easy and natural next step for your small business.