You’ve worked hard to build your business. After a few foibles, which is natural for all startups and entrepreneurs, you’re working on getting yourself and your business back on track and it’s going well…until you get to the money stuff. It’s okay. Most new entrepreneurs and small business owners stumble over their financial setups when they first get started.
Those stumbles are often the result of lowered expectations. Sure, when the business was just you in your attic tracking the money was relatively simple. As soon as you expand, however, financial tracking gets a lot more complicated. That’s why one of the most common pieces of advice you are given is to outsource your accounting and, if you have employees, your payroll duties.
According to the experts behind ADP Employment Tax & Compliance Services, it is very difficult to “ensure timely, accurate calculation and filing of employment taxes across an ever-changing landscape of tax rules and business structure changes.” And when they say ever-changing, they mean it. The tax codes for businesses change all the time, sometimes even from one day to the next. These changes are just one reason you should consider outsourcing your payroll and accounting duties. Here are 5 more:
Keeping track of all of the changes in the tax code for just one jurisdiction is almost a full-time job. Tracking the changes across multiple jurisdictions is even more challenging. You cannot dedicate yourself to that tracking because you have a ton of other responsibilities to oversee to keep your business running smoothly. You simply do not have the time it takes to stay on top of those details.
Penalties are Expensive
Even a single simple mistake in payroll can end up costing you dearly when the IRS finds out. Do you have the money to cover those fines and penalty fees? Probably not! It is far more cost effective for your business to hire a professional service to manage your payroll. What you spend will more than make up for itself in prevented fines and fees.
Employees are Impatient
Nobody on your staff is going to be understanding when you say “sorry, I ran out of time today. I’ll do payroll and issue your checks as soon as I can.” They have bills to pay and are counting on you. Outsourcing your payroll ensures that your employees will be paid on time, even those who choose direct deposit over hard copy paychecks.
The IRS is Even Worse
Have you ever been late on a payment to the IRS? Those people do not mess around. Missing even a single payment is enough to raise someone’s eyebrows and could result in an audit or other penalties. Outsourcing your payroll ensures that your own schedule will never dictate whether or not you pay your taxes on time and in full.
Every detail about your business and your employees matters when it comes to payroll. How much you withhold for taxes, insurance, etc. will vary from state to state. This is complicated enough when your business operates out of a single location. If you have multiple locations, figuring out how much to withhold/pay and from/to whom gets even more difficult to manage.
Look, even if you are a math whiz and data entry is your jam, trying to manage your own payroll and taxes is something best left for the pros. After all, as the owner of a small business, you need to be able to juggle multiple tasks at once and maintaining company finances is a full-time job in and of itself! These are just some of the reasons that it is better for you and for your business to outsource your payroll. We’re willing to bet you can find a few more with just a few minutes of research.