4 Reasons Small Businesses Should Outsource Payroll

4 Reasons Small Businesses 

Should Outsource Payroll

Feb 13, 2017 by Shubhomita Bose, Small Business Trends: Small Business Operations

As a small business owner, you may wish there was an easier way to manage your finances. A big part of this may be managing your payroll. It involves employees’ salaries, deductions, wages, bonuses and net pay. It’s also an area many businesses tend to struggle.

According to a TD Bank survey, 43 percent of small businesses have at least one employee. So business owners need to focus more on improving their payroll management. A simple way to do this may be by outsourcing.

Comply with Regulations

Tax regulations are complex and sometimes even a small change may have a big impact on your business. “There are nearly 10,000 tax jurisdictions in the U.S. which are changing constantly,” says Jamie Griffiths, vice president of bank partnerships at Paycor, a strategic partner of TD Bank.


“It’s very difficult for one person to manage a business and also stay up to date on these laws. Hiring an expert can remove that burden,” Griffiths tells Small Business Trends. A well-designed payroll infrastructure can make your life easier by ensuring you comply with regulations.

Jay DesMarteau, Head of Small Business Banking at TD Bank tells Small Business Trends, “Payroll services ensure that the business complies with complex regulations and that it stays up-to-date with the latest laws. This takes a lot of weight off of a small business owner’s shoulders for a relatively small expense.”

Recruit and Retain Employees

When it comes to matters related to their pay, employees want to know everything. That includes how you’re calculating their wages, deducting taxes and even calculating bonuses. Companies that have a proper payroll infrastructure in place attract the attention of potential employees.

DesMarteau says, “An outsourced payroll service can also make the business more attractive to potential employees. These services can provide added perks such as online check stubs, time tracking and apps where employees can view pay information.”


But it’s not just about recruiting new people. A systematic payroll management system can also play a role in retaining employees who are satisfied with the infrastructure.

Make Business More Attractive

A payroll management infrastructure ensures you comply with regulations and keep employees happy. From a long-term perspective, it secures your business and makes it more attractive for investors.

“While a payroll service is an additional budget line item, business owners need to think of it as a long-term investment that can make the business more attractive to potential investors, buyers and banks,” says DesMarteau.

Plan Business Growth

When you don’t have to spend time and resources on payroll management, you get more time to focus on other things such as business growth. By freeing up your internal resources, you can look for other areas that can support and sustain that growth.

DesMarteau explains, “With someone else worrying about pay stubs and direct deposits, an owner can better focus on long-term growth and the business at hand.”

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Office Position Available

Job title:  Receptionist and Office Assistant

Reports to:   General Manager


Job purpose

We are looking for a receptionist and office assistant to interface with our clients and support

our accounting staff.  In addition, this position is responsible for client invoicing and payments.

The ideal candidate will be experienced in customer service and interaction.  This position is the

face and voice of the company, so this person MUST have the attributes and experience that

are required to manage client interactions and interface with staff to meet company goals.

Duties and responsibilities


Administration

 Greet and provide support to visitors

 Manage incoming calls, faxes, mail, and e-mails and distribute to staff

 Manage outgoing faxes and mail

 Manage office supply list and associated ordering

 File creation and filing

 Maintain general office organization

 Assist general manager with administrative tasks

 Create and manage production software, specifically with project creation


Accounts Receivable

 Create monthly, quarterly, and general invoices in QuickBooks and CRM

 Process recurring payments

 Process payments

 Client interaction, directed by general manager, for collection of payment


Production Assistance

 Scanning and copying for accountants

 Data entry during overflow periods


Qualifications

The ideal candidate will have many of these qualities.

 Reliable, prompt, and professional

 Comfort and skill working with clients that may be challenging at times

 Extremely organized

 Comfortable working with little oversight

 Willing to learn and perhaps improve on office practices


The ideal candidate will have these credentials.

 High school diploma or GED

 Proficiency in Microsoft Office (Outlook, Excel, & Word)

 Minimum of 3 years in customer service or equivalent

The ideal candidate will learn and grow in these areas

 Proficiency in Excel

 Proficiency in QuickBooks

 Proficiency in our contact and production management software


Working conditions

Our office is both professional and relaxed.  We are not a strictly hierarchical office, rather we

approach client service as a team, in which we all have different roles and responsibilities.

The office is located near the intersection of Parham and Patterson.  Beginning hours are

Monday through Thursday 9AM-1PM.  There is potential for increased hours and

responsibilities associated with this position.

Escape These 5 Common Retirement Pitfalls

If you’re already contributing to a 401(k) or other retirement account, superbly done!  Pat yourself on the back, because there’s one thing about saving for retirement— it’s easier the earlier you start. Making contributions regularly will certainly help fluff your retirement pillow, but few actually have a savings goal in mind.  Knowing where you’re headed is half the battle, along with avoiding these other common retirement pitfalls.

1. Not knowing how much you need to save.  Many people have not even considered the actual number they need to reach in order to live comfortably after retirement.  You can use an online calculator, or talk to a financial planner. The number, at first, may be overwhelming, but remember that you have compounding growth on your side.  Having a goal to reach may ignite a newfound passion to make regular contributions.

2.  Not knowing how much you spend.  To better understand a retirement budget, you’ll need have to have a grasp on your current budget.  If you don’t know how much your spending on a daily, weekly, or even monthly basis, you probably won’t know where your money is going in the future.  Start tracking your spending in order to come up with a plausible retirement budget.  Keep a meticulous record for a few months, then sit down and estimate which of those costs could fluctuate up or down in retirement.  Expenses for children will likely drop, along with your dry cleaning bill or commuting costs.  Big bills such as mortgages are likely to be paid off as well.  However, keep in mind the type of lifestyle you’d like to lead once retired.  More travel, more leisure costs, etc.

3.  Not accurately budgeting for health care.  Before the word “Medicare” falls from your lips, stop to think about what won’t necessarily be covered.  Most eye exams and dental care, as well as any long-term care, aren’t covered under Medicare.  There are tools you can use, such as AARP’s health care costs calculator, that will help you estimate out-of-pocket costs you might incur.  

4.  Guaranteeing losses by responding rashly to market fluctuations.   It’s easy to panic when the stock market takes a nose dive and change your mind to a safer bet.  However, if you respond to losses rashly, you won’t be around for the gains, either.  Converting some of your holdings to cash doesn’t provide growth.  The best way to protect yourself is by diversification.  Talk to an investment planner and they can help you further diversify your portfolio beyond just stocks, bonds, cash.

5.  Keeping your head in the sand about fees.  Many financial institutions charge fees for their 401(k)s.  Some charge flat fees, others percentages, but the bottom line is you need to know what you’re paying.  Until the financial planning industry wins it’s battle for transparency when it comes to fees like this, you may have to search the fine print.  Paying even a 2% can wind up being a huge chunk of your savings.  Typically fees up to 0.5% are considered reasonable.

Getting to your retirement goals isn’t rocket science, but it does require some careful planning. Educating yourself and knowing what to plan for will help you achieve the comfortable retirement you’ve worked so hard for. 

6 Best Business Invoicing Practices

     When starting your own small business, invoicing plays a vital role in the life-blood of your company.  It's how you make money and make an impression on your clients.  It can also be one of the hardest things to keep up with.  Invoicing takes practice, a rhythm.  Here are 6 tips to avoid getting off schedule in creating and sending invoices as well as tracking down late-payers so you have time to focus on other aspects of running your company.

1.    Make your invoices as professional as possible.  If you send out handwritten scribble on invoices you’ve ordered for $.20 in bulk, some of your clients may be less inclined to pay you as promptly as other, more official looking requests for payment.  Be proud of your brand; have it printed on your invoices.  Make sure the amount owed is very clear and easy to understand.  Be detail oriented down to the color, font and wording of the document.  Be clear, plain and very official.  If you feel the necessity to include legal jargon, have a lawyer help you translate what you’re trying to say in plain english.

2.     Invoices are official records, so what’s on it must be correct and follow standard business practice laws.  If you’re an LLC, an LLP or other limited company you must provide your business’s registered address and phone number.  If you have one member or executive's name listed, you must have them all listed.  Make sure your document follows all of your local and state business requirements.  One of the benefits of purchasing an  accounting system for your business is that all of these things can be done for you.

3.    Stay organized by using invoice numbers.  Secondary to the total amount due, keeping your invoices organized and easily referenceable is key.  You can use a unique sequential number for each of your clients, or use a chronological method of organization where the date part of the sequence of numbers.  Assigning your client with their own customer number at the beginning of the sequence gives you a secondary way of referencing a specific client’s invoice.  Two examples for customer number 47 that had their first invoice on February 2, 2015 could be 0047-02022015-01 (Customer number, date, sequential number) or 0047-0001 (customer number, sequential number).

4.     Choose a clear payment structure.  Asking for a deposit before you begin your work, or even asking for the full payment upfront helps reduce financial risk to your business and is easier on your cash flow.  There is nothing legally stopping you from requesting a payment upfront.  If at the end of your services your client refuses to pay either the full or partial amount, you’ve lost your leverage to stop work until payment is complete because it’s already finished.  If you’re worried about losing clients by requesting a hefty sum upfront, offer your client a satisfaction guarantee or their money back.

5.   Be clear about your payment terms.  Your client should be aware and understand your payment terms when initially signing a contract with you, but make sure you remind them on your invoice.  Make sure your deadlines are clear on your invoices to remind your client of the importance to make a payment by that date.  You should also make clear and unquestionable any late penalties or fees you plan on implementing if the payment requirement is not met.

6.     Be prompt.  Not only is it efficient business practice to send out invoices as soon as the work is done, but if you’re lackadaisical about your invoicing practices you might run the risk of sending your client the impression that they can be as haphazard with their payment.  Do your book keeping and invoicing at least once a week.  Make it easy for your clients to pay you by including the different payment methods you accept by providing account numbers, online links, etc.  If you are using an accounting system, consider one that sends out automatic email alerts for late payments.  That can help you save even more time.

     Keep the cash flowing in your business by streamlining your invoicing process.  Making sure your client has no questions or doubts about how much, when and how they need to pay you is key in keeping your business afloat.  Efficiency is indispensable in invoicing practices to keep you and your client happy.  Follow these invoicing principles to help you achieve maximum cash flow and organization.