One of the most challenging aspects of running a small business is managing payroll.
It's complex, time-intensive, error-prone and is the cause of much headache for many entrepreneurs- to the point where many choose to outsource this process all together. Outsourcing was preferable in the past due to the constraints of traditional legacy software and the inability to integrate and streamline processes. However, what most small business owners don't realize is that there are innovative technologies that exist today which eliminate most of those concerns.
New payroll software is affordable, intuitive, easy to use, and integrates with accounting solutions like Xero, thus helping to simplify the payroll process even further. In bringing these two fundamental operations together, small businesses can scale at a more rapid and profitable clip. Learning and managing your own payroll software may seem daunting at first, but you will find that it will save time and resources in the long-term. Additionally, you will achieve an extra level of convenience by having your data close and easily accessible.
Bearing that in mind, here are five reasons why you need to keep your payroll in-house:
1) Save Money
Typically, third party services charge expensive rates on a per payroll basis for items such as employee time sheets and W-2's. However, the investment in a 'do it yourself' solution turns out to be much cheaper because you keep those resources in-house and can generate more reliable information. Who knows your house better than you, right? This saves you money because you remove the back and forth that has to occur when additions and corrections need to be made.
2) Save Time
As mentioned above, when you keep operations in-house, you save time by doing away with having to communicate with a third party. Another reason to keep payroll close at hand is that you have the advantage of integrating it with cloud accounting software. By doing this, you save a tremendous amount of time in data entry because the financials will be linked together. The sync of these two functions also helps to reduce the risk of error, which is valuable time that you can take back when you're managing the books at the end of the month.
3) Keep an Accurate View
With payroll in-house, especially in pairing with a cloud accounting solution, you always have a pulse on the data that is coming and going, keeping you well aware of any issues that may arise. Beyond that, you also have the oversight to forecast and plan ahead. For instance, perhaps you'd like to add more headcount in the next few months. With payroll and accounting paired together, you can carefully plan for the addition of new employees and see how that influx would affect your financials as a whole.
4) Gain Instant Access
When you submit your payroll to a third party and corrections need to be made, there will be instances where you need to make corrections. Unfortunately, this is not as simple as tapping the delete button or clicking a mouse. These services require you to contact their support team for any changes and sometimes force you to run payroll again. By keeping your payroll in-house, you will always have access to your data and make changes as needed, without added cost or consequence.
5) Have Control of Your Data
Perhaps one of the best reasons for keeping payroll in-house is that you have the ability to control all the reporting and data. So should any questions from your employees or bookkeeper or CPA come up, you are equipped to address them immediately. Furthermore, you provide an added layer of security to your employees by containing their sensitive information and not releasing it to an outside party.
Entrepreneurs experience many challenges in the day-to-day operations of their business. But by investing in an in-house payroll solution, you reap all these benefits can get back to the bigger and more important task of growing your business. Payroll can be a pain, yes. But if you learn to leverage the cloud and new technology available, it doesn't have to be.