When you think of all the equipment and money that goes into in-house payroll and HR—between hiring employees, payroll software, and technical equipment—is it really beneficial to your business? The responsibilities and extra expenses can become overwhelming, and you may not want to hire the extra employees. Because of this, more and more small business owners are turning to virtual Human Resources and payroll outsourcing. So you ask yourself, what are the benefits?
It will save you money.
There is so much effort that goes into these processes that smaller sized businesses are actually hurting, financially. You have to worry about keeping payroll employees up to date with changes in tax rates, providing training and support, program maintenance, and generating reports for accountant use. Working with a payroll provider, and virtual HR, could greatly reduce the extra costs of having in-house services, and many accountants actually recommend this to businesses. You can breathe easy knowing that you have a reliable and trustworthy provider without the extra costs.
It will save you time.
As a new, and/or small business owner, you end up with the task of having to do all the different duties that big businesses just hire various employees to do. However, you may not have the financial means of hiring extra employees. Which leaves you to do majority of the work. Doing in-house payroll, yourself, takes a lot of time because you have to be very careful when filling out tax forms, payroll processing, and audit reporting. Along with the responsibilities of payroll, you are also left to develop and update employee handbooks and conduct interviews. All of these things take time, and time is money. With having virtual HR, they will be able to provide services including: developing and updating your employee handbooks, policy development, employee file audits, and employee onboarding and off-boarding. Likewise, a virtual payroll service would provide: reporting new hires, complete payroll processing, generating W-2s, state and federal filings, and tax payments; among other services.
Employees at virtual payrolls are experts.
Typically, when you hire new employees for payroll, they may or may not have experience in that particular area. Because of this, you’re left having to get them acquainted with the system, and ensuring that they are doing sufficient work. Although, these are administrative responsibilities, it affects the business as a whole. According to experts at VirtualHr.com.sg, errors or delays in salary distribution can affect the morale between employers and staff, which would be detrimental to the reputation and growth of the business. With using a provider, it is assured that the people, that will be handling your payroll, have expertise in this particular field and are paid to handle any and all of your concerns. You will only need to provide basic information, and the provider will take care of the rest; ridding you of the hassle associated with processing payroll.
You can avoid potential IRS mistakes and penalties.
According to the IRS, an estimated 40 percent of Unites States small businesses pay more than $800 per year in penalties, largely due to incorrect or late payments and filings. These penalties can easily add up. However, many payroll companies guarantee that you will not have to pay penalties if you use their services. If there is an error, they will take liability and correct it, as it is their business to keep up with changes in tax law, rules, and regulations.
You will have increased data security.
With in-house payroll, there is always that concern for identity theft and embezzlement. Employees will be able to view personal records of other employees, and could easily tamper with the records for personal gain. Besides this, how secure is the payroll data on the company’s network or server? Using virtual payrolls ensures that your data will be stored on encrypted servers, alerting you of various types of payroll fraud and other unethical activities. In addition, you will have multiple server locations and data backup. This level of security can add up in expenses, but there are many services that have this as a standard service, so it is best to do some research and ask questions when choosing a virtual payroll company.
You will have access to a variety of services.
Some providers offer additional services along with the standard tax calculation and payroll. They may offer services like allowing employees to review checks, benefit information, workers’ compensation payments, and updating information. The services would assist employers with offering benefit enrollment, direct deposit, uploading PDFs, tracking licenses/certifications of employees, compensation reports, performance reviews, bookkeeping services, contractor services, and contract generation. When choosing a provider, you should identify the services that are more relevant to your needs, and find a company that offers those services.