Should I Be Using A Payroll Provider For My Small Business?
As a small business owner, you’re no stranger to multitasking. Juggling multiple tasks outside your core strengths is part and parcel of daily life. Whether it’s managing finances or marketing your brand, something always demands your attention. As your business grows, this plate-spinning can get difficult. It is certainly common for time-poor owners to cut a few corners here or there to save time and money.
However, the one area in which you should never apply this strategy to is payroll. As you take on more employees, payroll issues can get overwhelming fast. I have heard many stories about small business owners spending countless hours each week manually calculating employee paychecks and tax withholdings. If you are nodding along to this, ask yourself, how much time do I have left to focus on growing my business and serving my clients with payroll problems in the way?
I’ll go ahead and answer that. Not a lot.
The good news is that there is another option: using an online payroll provider (such as Ceridian or Payworks) to help you complete this repetitive, time-sensitive task that is payroll! Not only will this decision save you time, but an online payroll provider will help business owners take care of all the things that can get you in hot water, such as payroll compliance and tax-related issues.
In this blog article, we’ll explore the benefits of using a payroll provider for small businesses and why online payroll solutions are a handy option that saves money and time while boosting productivity.
Online payroll services ensure accuracy and timeliness
A few quick questions.
How much of your day is spent trying to figure out the correct gross pay your employee should be paid for each pay period?
Are you using a complex spreadsheet that has many formulas?
I’ll sometimes bet, despite your best efforts, mistakes are made, right?
I am sure you, like many other small business owners, believe that your employees are your biggest assets. As cliche as that sounds, it is generally true! That is why if you want them to stick around, getting their pay right is vital. When many employees live paycheck to paycheck, any delays can cause a lot of unnecessary stress, not to mention the fact you will have to spend even more time on a payroll do-over.
“But I only have a few employees!”
Sure, right now! But if you are looking at growth or scaling up soon, using an online payroll solution now will save time later.
It’s definitely in your best interest to ensure the payment process is as seamless and painless for your employees as possible. Reputable outsourced payroll providers give business owners the tools to better manage their businesses payroll. In turn, it cuts down on the errors made during the year.
What benefits will my employees get from an online payroll service provider?
Here are a few features that any good payroll service should offer:
The ability for employees to receive direct deposit payments on a set frequency instead of a manual cheque or eTransfer.
- The option to direct some of their funds to a different bank or savings account.
- Electronic access for your employees to view pay stubs and year-end tax forms.
- Call-in support
Online payroll services ensure compliance with tax laws
Payroll taxes can be complex and are ever-changing. Failing to comply with tax requirements can result in costly penalties and legal consequences. An online payroll service can help ensure that your business complies with national and local tax laws, including withholding, reporting, and remitting payroll taxes.
On that note, one of the biggest perks of using a Canadian payroll provider is their ability to make CRA remittances for you, keeping you compliant with CRA. Regardless of your remittance frequency, CRA remittances will be done automatically by your payroll provider. Of course, this means you can take that “CRA source deduction remittance” reminder off your to-do list.
If you have ever been penalized by the CRA for late fees, you can rest assured this will never happen again with an online payroll provider, as the payroll company will remit them for you. Just think, if your remittance is quite large and it’s five days late, this can be a big headache!
Payroll service providers can also take the T4/T4A filing off your plate too.
Employee data security is water-tight
As an employer, you have a legal obligation to protect sensitive employee information, such as Social Insurance Numbers (SIN) and bank account information. Payroll providers take security of your employees’ data seriously and are compliant with regulations surrounding payroll that most business owners aren’t aware of.
24/7 accessibility to payroll records
From a legal perspective, it’s crucial to maintain accurate and accessible payroll records in case of audits or disputes. It is no use stuffing your documents in a cardboard box or in a file that you rarely open on a computer you rarely use.
A payroll service provider can provide cloud-based instant access to payroll records, making it easier to retrieve and manage records as and when they are needed.
Phone-in payroll support
Many of these programs have phone-in support. We at eGO suggest you select a provider with solid call-in support. Payroll is time-sensitive, and phone-in support is paramount.
There’s nothing worse than a chatbot when you need help immediately.
Official pay stubs upon request
Have you ever had an employee ask you for an official pay stub?
Are you thinking to yourself, darn! I don’t know if my pay stubs have all the required items!
That can be a thing of the past. Reputable online payroll providers will be able to get one in your inbox in a flash with all the correct details, so you and your employees don’t need to worry.
Technical advice
Has an employee ever told you that their overtime earnings aren’t taxable? What about an inquiry from an employee stating that one of their benefits shouldn’t be taxable?
With an online payroll company at your back, you don’t need to know everything. Payroll providers understand the legislation for each province inside-out and ensure that your payroll is always compliant. Even if your business changes in any way, they should be able to accommodate you and alleviate any concerns you have.
State-of-the-art payroll software
There is no gigantic excel spreadsheet to process payroll here! Regarding the sheer quantity of payroll data, the best option is to rely on a company that utilizes the latest payroll software to pay employees. It is what they base their business on after all – paying employees accurately and on-time.
Record of Employment forms
Another perk to using a payroll provider is that you can submit a record of employment form (ROE) electronically. If you’ve ever had to use ROE Web—you’ll know the struggle!
Forget that! By making the change, you can submit a record of employment form, or get help from your payroll provider, so that your employees won’t come knocking when you forget to issue it manually!
How much does an online payroll cost?
Payroll costs money, but not nearly as much as you might think. Our average client here at eGO Bookkeeping spends around $600-$800 on their payroll providers fees annually (that’s only $50-$67 per month).
Sure, it isn’t free but think of how much time you will save by using a payroll provider to assist you with the never-ending task of performing payroll.
Is it time to make the payroll switch?
So, you pay a small fee, and in turn you’ll cut down the time you spend worrying about all those payroll items like numbers, hours, related pay rates, tax issues, and employee concerns. We could go on and on regarding the perks of using online automated payroll processing, but to most people, payroll is boring. That’s probably reason enough to rid yourself of the pain!
The only question remains: why are you still using CRA’s Payroll Deductions Online Calculator (PDOC) and paying your employees by manual cheque and eTransfer? Don’t you have better things to do?
Choose eGO bookkeeping for your payroll needs
eGO was founded with the goal of helping small businesses navigate smoothly through each financial year by assisting them with bookkeeping and payroll needs.
We are a big advocate of cloud bookkeeping and online payroll processing. We stand ready to help small businesses transition towards a more digital approach. If you are prepared to make the switch, contact us for a free consultation. You won’t be disappointed!
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