Running a small business takes absolute focus. As a small business owner and entrepreneur, it won’t take you long to realize you only have so many hours in a day. As you keep driving your business towards success, you will soon learn that you cant wear all of the hats for your business. You might also have to face the fact that limited financial resources will create a need for you to find more efficient ways to run your business.
As you contemplate ways to outsource certain business functions to create more time for you to actually run your business, you might notice certain accounting functions lend themselves more naturally to outsourcing. In fact, payroll processing is exactly the kind of task you should consider outsourcing to your CPA. Why?
Payroll processing is a critical part of every business. Employees want to get paid, and the IRS wants their share in taxes. That makes payroll processing complicated and time-consuming. Also, it can be a little costly to have to hire an employee (with benefits) just to process payroll.
In case you need more convincing about why having your CPA process your payroll is a solid idea, here are three reasons it makes sense.
1. Economies of Scale Save Money
In all likelihood, your CPA is already processing payroll for other clients. They have the software and human resources in place and have the training and know-how to handle any kind of payroll processing needs.
Because of economies of scale, payroll processing becomes a shared cost among all clients that need such services. That means each client only has to pay a portion of the costs a CPA incurs to provide payroll to their clients that want it. For you, the savings can be quite substantial if you can avoid hiring another person just to handle payroll.
2. Time Savings
Most companies process payroll at least twice a month. Every time payroll deadlines approach, someone has to take on the task of gathering payroll information, inputting it into a payroll software system, cutting payroll checks (pay stubs), and distributing payroll to employees every payday.
After employees have been paid, the payroll person has to focus on getting payroll taxes to the government on a timely basis. That requires the preparation of payroll tax liability reports (with reconciliations) and the issuance of tax monies to the IRS and state government agencies. All of this takes a lot of time.
An employee could use that same amount of time performing some kind of other tasks that would help the company generate revenue. Bottom line: Time saved on payroll processing could be money earned in other areas.
3. Taking Advantage of a CPAs Expertise
As was mentioned above, payroll processing is a complicated task if no other reason than the need to manage payroll tax liabilities. Since payroll laws and tax rates change at least once a year, someone has to have the knowledge and time to stay up on such changes.
Staying up on tax law changes comes naturally for CPAs. A lot of the work CPAs do is compliance work, which means adherence to accounting and tax rules and laws. If your CPA is processing your payroll on your behalf, they already have all the information they will need to make sure employees and the IRS get paid properly. It takes very little extra effort for them to stay informed whereas you would have to invest time and money looking for information.
After reading this, you should be able to see there are real benefits to outsourcing your payroll to a reputable CPA or CPA firm. You should contact your CPA today and see what they can do for your business payroll processing needs.
