5 reasons to hire a payroll company ? Accountant by Day

Many of the clients I work with are foreign companies expanding to a new location. There are many things a new company needs to have on it's to-do?list - applying for a tax id number, selecting a site to locate?their business, payroll services?- but one of the top items on the list of any new business, whether foreign or domestic, should be hiring payroll services?to make sure that your employees are paid?in a timely fashion and in accordance with local laws and tax codes.

Why? Because you need to pay your employees of course! Payroll is a complex process, and every country has different rules. I can't think of a single client I've worked with that does their own payroll in-house. Don't forget to shop around for payroll services though - just because a company is big and famous does not mean that it is the right payroll service provider for your business!

Why should you hire a payroll company? Isn't that just another cost to add to your company's expenses?

Avoid the hassle

If you are running a small business, chances are, you don't have time to keep track of payroll yourself. Hiring another employee isn't worth it either, since payroll processing most likely won't be?a full-time job at a small company.?Save yourself?the time and effort of having to become a payroll expert instead of working on your business. Most companies find it to be?more cost effective to hire an outside service for these duties.

Hiring an expert

Payroll comes along with many moving parts. Employers need to withhold taxes from their employees' paychecks, accrue?for accumulated vacation time employees earn, and keep track of any advances or withholding?from employees' pay. Employers also need to make sure that everyone's check is cut?on time and makes it to the right employee in a timely fashion. A good payroll company will know the laws of the country it operates in, as well as any specifics of the state/regions that your employees are working in. Their employees should be?well-trained in the running of payroll, and managers should oversee their work. Chances are, your in-house employees won't be as savvy as an employee of a firm that does nothing but payroll all day long.

Advanced technology

Your typical payroll service provider will offer your employees perks that would most likely be difficult for your small business to provide, such as direct deposit, and secure electronic paystubs. Most of my coworkers and I prefer and?to receive our pay checks and pay stubs electronically. This method of paying employees is commonplace and expected from employees.

Separation of duties

In a small business with only one or two employees handling the accounting, it can be very difficult to create enough separation of duties to prevent any one employee being able to commit fraud. By outsourcing the payroll process, you will be able to separate this vulnerable area away from any accounting employee that may already have access to many other accounting functions. An employee that keeps the accounting books, cuts the checks, and keeps track of payroll could easily add fictitious employees to the monthly payroll without vigilant oversight from a manager. Rather than keeping an eagle eye on the employee, outsourcing payroll can prevent some potential frauds from arising.

Add-on services

Many payroll companies offer additional services that you may find that your business needs as it grows. Since it makes sense to hire a payroll company right from the start, you will have the added benefit of developing a relationship with the company so that you can feel comfortable putting other services in their hands - such as bookkeeping and other accounting services.

Convinced yet? Ask around a few other business owners in your area to see what choice they made to help you make your decision of whether to outsource payroll. You may be surprised how many of these businesses use outside companies to handle this function.

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Source: http://www.accountantbyday.com/2012/03/13/5-reasons-to-hire-a-payroll-company/

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