Running a small business can be so much fun that it's easy to forget that your employees actually want to get paid for their efforts.
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Well, believe it or not - they do. And paying them involves a lot more than signing a few checks. You need a system in place to manage your payroll in a timely and efficient manner.
That's what payroll accounting does. It keeps track of your company's payroll function so that everyone - you, your employees, and the government - is happy at the end of the day. To meet their payroll accounting needs, small businesses turn to a variety of different options. Here are your choices:
The meteoric success of payroll services is not accidental, but rather a reflection of the business community's willingness to outsource the tedious and complex task of payroll accounting to outside specialists. The upside of outsourcing payroll is that payroll services ensure your company complies with federal and state laws pertaining to payroll. That's a big deal considering the time investment it would take you to stay current on payroll-related legislation.
Another big plus is that payroll services are responsible for keeping track of each employee's accumulated earnings, tax withholdings, and other information needed to issue W-2 forms at the end of the year. They also stay on top of things like direct deposits, salary adjustments, quarterly tax payments and all of the other details that can distract you from the important job of leading your company.
Of course, payroll companies do charge a fee for their services, so if you decide to use this option, be sure to shop around for the best deal.
If contracting a payroll service doesn't sound like a good fit for your business, you also have the option of doing it in-house. But if you plan on saving money by personally administering your company's payroll, you might want to think twice. Even if your company only has a few employees, you can waste a lot of time dealing with payroll-related details. Instead, designate the job to an employee who can give it the time it requires so you can dedicate your time to other things.
Whoever ends up doing payroll in your company will be happy to know that there is a lot of software out there to help them. In fact, most accounting software solutions have payroll modules. Start by assessing the capability of your current accounting software program. If it doesn't have a built-in payroll function, chances are it's available from the manufacturer as an add-on. If it isn't, then you'll need to decide whether to change your accounting to one that does, or attempt to find a payroll program that is compatible with your current system. Either way, it's worth your while to find a computerized system that meets your needs rather than trying to do it the old-fashioned way.