It is quite difficult to prepare your small business payroll if you don’t have any background on accounting or any experience in preparing a payroll. A small business owner can be challenged and confused in preparing payroll for his employees. It is also a fact that if you do not make exact entries in your tax returns, the IRS can impose penalties on your business and this is why business owners also get intimidated when processing payroll. Many business owners are willing to pay experts just so to make it right when processing payroll. There are two ways to have accurate entries in your payroll tax returns, and they are to either outsource your payroll processing or do it by traditional means or through an in-house payroll division.
Below are some of the reasons why small business owners will benefit from payroll outsourcing.
There will be no problem with the correctness of your payroll if a CPA does it for you since they are experts in accounting and payroll processes. However, it can be very expensive to keep a in-house payroll processing department by hiring a CPA since they charge hundreds of dollars for every payroll run. And if you have a weekly or bi-weekly payroll, the amount will surely increase. This expense can surely eat up your business profits.
The benefit of outsourcing your payroll processes is the accuracy of your payroll since it is also processed by CPAs. Outsourcing your payroll is not expensive at all compared to hiring an in-house accountant. With its accuracy and cost-effectiveness, outsourcing your payroll is the best option to take. Payroll processing does not have to eat up your business profits so this will not happen if you outsource payroll processing.
There are a lot of business owners penalized each year by the IRS for paying or filing their payroll taxes incorrectly. You might save a lot in doing your own payroll tax returns, but if you make a lot of errors, these savings will amount to nothing. Payroll outsourcing companies automatically calculates, pays, and files your small business payroll taxes for you. You will always be on time to pay your payroll and to file your payroll tax returns since payroll outsourcing services are automated services and so they can give you fast results.
If you use outsourced payroll services then you will find out that the process is very simple and easy. You simply need to log into your outsourced payroll service’s secure online portal and enter the hours each employee worked during the pay period, and after submitting the details, your payroll is done.
You need to give your employees either a W-2 form or a 1099 form at the end of the year. Outsourcing companies keep track of all these forms and file it for your. Your payroll services prepared these forms for your employees which you can simply print from your computer.