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HANDLING EMPLOYEE PAYROLL: IN HOUSE OR EXTERNAL?

Most people did not go into business dreaming of managing payroll, but payroll management is an incredibly important function.  (Ask your employees how important accurate and timely payroll is to them.)

As an employer, you are responsible for calculating the earnings of employees, along with withholding for taxes and other deductions like Social Security and Medicare, recording all payroll activities, and preparing and filing tax documents and returns to federal, state, and local tax agencies.

And, of course, you pay your employees.

Managing payroll can be time consuming and expensive.  If you have employees, you must manage the payroll function, but you can choose whether to keep the function in house or to use outside services.

  • 10 Quick Tips to Streamline Payroll Management - Whether you're just starting out in business or your company is in the early stages of growth with new employees, expanded services and more products in the catalog, maintaining payroll is an essential business activity undertaken with care, accuracy and consistency.
  • Keep Payroll Management in House: Track Company Financials Up Close - Many companies choose to manage payroll internally, most using accounting software like QuickBooks, Bookkeeper, Peachtree, and NetSuite that includes payroll functionality. The advantage is that total control is maintained and the cost of managing payroll - assuming a skilled administrator is in charge of the process - is usually relatively low. The disadvantage is that finding a knowledgeable employment and payroll specialist can be difficult and mistakes can be extremely costly. Tight internal controls are also necessary to ensure the chance of embezzlement is minimized.
  • Employee Payroll: Don't Outsource – Best-Source! - Payroll processing services can handle the entire payroll process: Filing forms, writing checks, reporting, and depositing payroll taxes. The advantage of a payroll service is one stop shopping: the service takes care of all payroll functions, from adding a new employee to ending their employment (in payroll terms, at least). The disadvantage is that costs can be high for multiple employees. Transactions are usually billed on an a la carte basis. If you add a new employee, you'll pay a fee for the service. Also, because the service operates somewhere other than your business, complex or unusual situations may require time and effort to overcome and can create frustration.

 

 

 

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