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You’re running your own business. You’re on top of everything and multitasking like a champion. You’re also processing your payroll and calculating taxes and… kind of wishing you were doing literally anything else.
We get it. Payroll isn’t exactly the most thrilling thing on your to-do list. Especially when you could be building up your business instead by working on that funky new product concept that’s going to be a game-changer.
The good news is, when it comes to payroll solutions, you’ve got options. Like outsourcing your payroll so that you don’t have to spend hours dealing with it yourself. However, you need to bear in mind that the outsourcing process has pros and cons and that there are other options to consider that may be a better fit for your small business.
Okay, so what is outsourcing payroll all about?
Outsourcing payroll is pretty much exactly what it sounds like. You hire another company, usually called a “service,” to run the numbers for you, deal with pay stubs, payroll taxes, deductions and benefits — in short, all the tasks that currently have you spending hours on a spreadsheet. (No offence, spreadsheets!)
The payroll service company acts as your one-to-one advisor, and you get to be completely hands-off aside from giving them some basic information. Goodbye in-house payroll.
They handle all the legal work and ensure you’re compliant with the ever-changing CRA (Canada Revenue Agency) regulations. They also offer legislative advice and guidance tailored to your business.
If that payroll management option sounds like it’s likely to be pricey, you’re correct. It is. But let’s start with the benefits of the outsourcing process. 😉
The pros of outsourcing payroll
Save time
One of the biggest benefits of outsourcing payroll is that you save a lot of time because your payroll service company does everything for you. And, as a small business owner with a lot on your plate, that’s music to your ears, right?
Get personalized legislative advice
As mentioned above, your payroll service provider will also handle things like regulatory compliance, advise you and provide support if something goes wrong.
Have a one-to-one relationship
Something else business owners find appealing is that many payroll service providers will assign a dedicated advisor to your company. In other words, they’re your payroll person, they know the ins and outs of your business and will work closely with you to make sure everything runs as smoothly as possible.
You don’t need to know payroll
Naturally, this hands-off approach also means you don’t actually need to know much about your own payroll other than handing over some basic data, like the number of hours your employees have worked. All the in-depth payroll processing and calculations take place in the background.
Reduce payroll errors
Using a dedicated payroll service provider can also help you avoid common payroll errors – like miscalculated tax withholdings, remittances or incorrectly processed garnishments.
The cons of outsourcing payroll
Cost
Yup, there’s no getting around pricing. Using a payroll service provider to outsource all your number-crunching is likely to set you back $500, or more, each month. And while that may prove to be cost-effective for a large enterprise that could otherwise hire payroll staff, for most small business owners and startups, that amount is likely to make a notable dent in your budget.
Less control
Not having to deal with your own payroll data also has a flipside – if you don’t stay on top of things, there’s a risk of losing control of the payroll process. While it’s nice to have someone handle it all for you without the need to be an expert, it also means you need to do your homework and ask for reports and updates on how your payroll works when you need to make any changes or big decisions. In other words, it might end up feeling like you do need to be a payroll expert to stay on top of your payroll expert!
Legal liability
Another downside to consider is that, whatever happens, you’re still legally on the hook regarding how your payroll is being processed. So if there are mistakes, especially ones you can’t spot because you’re not involved, the CRA will ask you for the answers and you’ll ultimately be liable for any penalties.
Now, of course, most reputable payroll companies will make every effort to “get it right” and will help correct any mistakes, but this legal liability is still something to bear in mind.
Relying on a third-party
Outsourcing processing payroll completely also means you’re dependent on the responsiveness of your payroll service provider when queries or issues arise. This means that any delays from their side could impact how you run your business or even cause issues in human resources with employee satisfaction.
So, what are the alternatives to outsourcing your payroll?
Payroll software
One of the best options is to use automated payroll software that’s designed and built with small businesses in mind.
Wagepoint focuses on just that: Simplifying and streamlining the payroll process for small business owners as much as possible. You’re still in control and handle your own data, but the complex calculations and tax filings are automated, and compliance is built into the system. Not to mention direct deposit eliminates the need for paper pay cheques and an employee portal lets your team see their stubs and year-end tax forms. This means payroll administration becomes quick and easy without complications.
In fact, client feedback shows that using Wagepoint’s platform, small businesses can get through payroll in just 15 minutes, even with a rapidly growing company. Talk about time savings.
And, if you do need extra help, Wagepoint has a dedicated team of payroll specialists on-hand that can point you in the right direction to access the CRA resources you need to stay on track.
Wagepoint’s software is also SOC-3 compliant and has built-in features for data security, like two-factor authentication, to make sure your data and sensitive employee data stay safe and protected.
Better still is that it’s not going to cost you an arm and a leg. All while retaining control over your data, compliance and payroll processes.
Outsourcing to an accountant or bookkeeper
If all of that still sounds too time consuming, or you just want the additional support of a “go-to” payroll advisor, you can also outsource your payroll to an accountant or bookkeeper who’s partnered with Wagepoint.
By doing so, you keep the visibility while still getting the added benefit of a dedicated expert. It’s kind of like outsourcing “thinking about payroll” while still paying a lot less than you would for a bigger payroll service and avoiding total loss of control.
Payroll, simplified
The point is, whatever your payroll needs, there’s always an option out there that ticks all the boxes in terms of time and cost savings. Picking the right one is just a matter of ensuring you have all the information you need at your fingertips to make the best decision for you and your business.
Interested in learning more about Wagepoint’s payroll solution? Get started!
