Knowing when to make critical business decisions can be as easy as looking for a freeway on-ramp sign. However, if you don’t know what to look for, a great opportunity can pass right by. When it comes to deciding if it is the right time to outsource your payroll, here are three signs it is time to find a new partner.
- Time: What’s the old saying? Time is money? That saying could not be truer when it comes to managing payroll. 27% of small businesses spend more than six hours per month just dealing with payroll taxes. Some business owners reported spending more than 10 hours a month on payroll taxes. 10 hours per month is a lot of time spent just calculating, filing and sending in payroll tax forms to various agencies. Break out your stop watch, how much does it cost your business a month to process payroll internally?
- Fines: There is a 32-page IRS document that details out how and how often to file your federal tax deposits if you’re doing your payroll in house, you probably have it saved as one of your favorites (if you don’t, you should). Fees and fines will start to add up quickly if you don’t follow all the rules. Doing your payroll means that the liability falls on you to do it correctly. One or two penalties will start to add up. Unfortunately, this sign is more like a speeding ticket – but if you get one, it’s time to evaluate the real cost of doing payroll in-house compared to outsourcing it.
- Employee turnover: Your staff is your most valuable resource and the cost to replace an employee rather than retaining them can be astronomical. To find out the true cost of employee turnover click here. There are many reasons why an employee may move on, but if they are leaving because they wanted direct deposit or the ability to see their payroll information online or because you’ve messed up their paycheck several times, it’s time to make a change to your payroll solution. Would you want to work for a company that didn’t have their payroll in order?
There is a big misconception among small business owners that doing payroll on your own will save you time and money vs outsourcing it to a payroll company or service bureau. The reality is the time to do it yourself has a price tag but doing it wrong has an even greater cost. Look for the signs and know when it’s time to find a trusted partner to handle your payroll. Finding the right payroll partner will allow you to do what you do best, grow your business.