If time is money, figuring out how to save time is particularly essential for small businesses, especially those that can be devastated by even minor cash-flow issues. In fact, many cash flow challenges can be blamed on delayed financial processes –whether clients are overdue on receivables or payments are taking longer than ideal to be processed.
The greatest challenge of all, perhaps, is implementing an effective payroll system. With many small business online payroll systems on the market, numerous options are available for speeding up this fundamental part of business. Here’s is how it works.
Tax season is labor-intensive for everyone, but a 2018 taxation survey by the National Small Business Association found that federal taxes are especially burdensome for small businesses. In fact, one in three small businesses spends more than 40 hours a year filing, with 63% of those same businesses spending over a thousand dollars annually on federal tax administration.
What’s more, taxes for small businesses can be unusually complicated; as a result, serious errors can occur. Addressing these errors is not only laborious, but costly—IRS tax bills for small business owners often come with extra penalties.
Small business online payroll services streamline the whole process by collecting, calculating, and filing tax information in one automated system. This not only cuts down on the amount of time payroll staff must spend crunching numbers, but it also helps prevent expensive mathematical errors. Some providers even offer an accuracy guarantee, which means that any late or inaccurate filing penalties will be paid by the provider, not by the business owner.
Managing different employee needs
Online payroll services for small businesses are also flexible enough to accommodate all different categories of employees, including freelance contractors who need 1099s, along with standard full- and part-time workers. There are payroll services tailored to different types of workers, such as household workers, and services that can handle additional elements like workers’ compensation or background checks.
Moreover, online payroll systems offer extensively customizable packages to suit small businesses of various sizes and industries. The adaptability of these services helps manage a wide range of employee needs more quickly than if these requests had to be farmed out to multiple individuals in HR or management, reducing time and effort across the board.
Of course, the usefulness of small business online payroll systems extends far beyond the tax season alone. These services also save time by offering hassle-free access to important information for day-to-day operations. Most also come equipped with self-service functions for both employees and managers. For instance, some even offer mobile apps that employees can access from anywhere and easily update payroll information, report time and attendance, and more. Some also provide employees with pay stubs and W-2s after they’ve left the company, which minimizes data entry and processing time on the employer’s part.
Finally, small business online payroll services are usually designed to integrate with other accounting and HR tools or systems—and those that aren’t yet are expected to move toward more comprehensive features in 2020. In addition to keeping employees from spending hours trying to perform basic tasks, this reduces the need to hire extra accounting and HR staff, saving small businesses both time and money overall.