Payroll Services Giving Your Company the Edge
If you're a small business owner, chances are your company needs a business payroll service. Payroll is one of the most important functions for any employer, but do you really understand what that entails?
In this article, we'll be looking at several benefits to using payroll services. We'll look at the pros and cons of using a payroll service, and will discuss the different types of payroll services available.
First off, a payroll service is essentially a company that handles all of your business's employee tax code and deductions. This is an essential function for any business owner, but it can also be rather tedious.
Different payroll services have different styles and structures. Some companies offer full service—you sign up for their service as well as providing your own data— while others offer discounts if you provide most of the information yourself on site. In some cases, you may even be able to choose between different types of services depending on what type of job you do or how much tax money you make.
The various payroll services in the U.S. employ a variety of software systems, ranging from paper and pen to advanced computerized systems, depending on your needs.
Before you choose a payroll service, it's crucial to understand what the service does and what you get for your money. You should evaluate each service on its own merits as well as compare it to existing services in your area.
But not all payroll services are the same; some may be better or worse for your needs than others. Some companies offer complex tax calculators that provide estimates of the taxes you owe or get back based on calculations that include financing and retirement benefits such as 401(k) plans—something other companies might not offer at all.
Different payroll services also have different minimum requirements. Some offer services only to small companies, while others provide payroll services to large companies as well.
If you think your business could benefit from a payroll service, it pays (no pun intended) to do some research. A good payroll service can make running your business easier while giving you valuable tax information and financial advice as well. By contrast, a bad one can create problems with the government or waste your time and money.
See Related: Finding the Right Accounting Firm for Your Business
If you haven't used a payroll service before, we recommend that you ask a few questions first. Here is a list of good questions to ask any company you are considering using:
1. How long have you been in business and how many clients do you currently work with?
2. What types of services do you offer?
3. Will I be able to make changes or updates to my payroll account online, or do I need to call ahead?
4. Do I need to provide data on employees myself, or will it be provided by your company? Is there an added cost if I need more information than just names and social security numbers?
5. Do you provide online access to my account? Can I view or make changes myself or do I need to call in?
6. Do you offer tax calculators, and what types of calculators do you offer?
7. What is the minimum annual salary for a worker that you will support with payroll services?
This is a very important question; if you have one or two high-salary workers and none with small salaries, it might be cheaper to pay an accountant out of pocket than to use a payroll service for your company.
Another concern is how much you pay for a payroll service. If the company charges a monthly flat rate for services that are only useful if there are a lot of workers, it could cost you more than if you had been using an accountant.
However, some companies offer low monthly fees in exchange for frequent interaction with the company. They will still maintain records of your employees and your payroll taxes and send them to the IRS, but they may also contact you via e-mail or phone to ask questions or keep an eye on your employees' paperwork. In this case, the cost is usually lower than regular monthly fees and may be useful even if your business employs only one employee or even no employees at all.
See Related: How to Find and Hire an Accounting or Bookkeeping Service for Your Business
Keep in mind that, if you do choose a payroll service, it's important to maintain your own records. Ideally, you should keep a copy of all your company's tax returns for the past several years. Even if you no longer work with an accountant and use a payroll service, you will still need to send your company's tax return (as well as information about salaries, deductions and other data) to the IRS every year.
Another concern is how you get paid from using a payroll service. Some companies may pay you by check, while others use direct deposit. The direct deposit option is by far the fastest, but some companies may charge more for this service.
Finally, when you are choosing a payroll service, it's important to remember that you don't need to choose just one; if the payroll service you have decided on doesn't fit your needs exactly, or if they are too expensive or inconvenient, there are other options available. You can use more than one company at once or change companies as needed: payroll services aren't marriage contracts – they're contracts of convenience.
If you have additional questions about payroll services please post them below in the comments section and we will answer them as soon as we can.
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