One of the “necessary evils” (as Bryan Clayton CEO of GreenPal puts it) to ensuring your business operates smoothly is the process of running payroll. I think it’s safe to say that no busy business owner enjoys the task, but when it comes to taking care of your employees, paying them accurately is high on the list.
According to Marc Prosser, CEO of Fit Small Business, “one in three American companies get fined every year for payroll mistakes, whether through math errors, mistakes in documentation or late payments.”
I gathered some insight from said business owners nationwide about the top challenges they face with running payroll. Do any of these sound familiar? What else would you add to the list?
Greg Szymanski, who works for a real estate development firm in Seattle provided the following struggles:
· It’s hard to maintain work/life balance because you always have to be around to run payroll. It makes seemingly routine things, like scheduling a week of vacation, troublesome.
· It’s hard for smaller firms to build bench strength in payroll (meaning that more than one person can do it) because most businesses want to keep compensation data as confidential as possible.
· More than 50% of the time, payroll is not routine – meaning there is something that requires personal attention.
Clayton says they handle all of their bookkeeping and payroll duties in-house with a range of 20-30 employees depending on the time of year. Here are the struggles they face:
· I don’t know why, but all payroll duties just stink. [Fair point]
· Manually transferring hours worked and calculating overtime.
Zondra Wilson, CEO of Blu Skin Care, LLC says that she “runs payroll in-house and it’s a hassle. It just takes up too much of my time.” In addition, Wilson mentioned the following:
· Labor costs for time wasted on distributing paychecks.
· The cost of correcting mistakes which may include extra labor.
Jesse Harrison, founder and CEO of Pre-Settlement Funding LLC says:
· The most annoying thing about running payroll in-house is keeping up with all the laws. The laws change every day and you never know if you’re doing it right on the particular day that you’re taking care of payroll.
Prosser continued giving this final word that we can certainly agree with:
“Payroll taxes are complicated and the mistakes can be costly. That’s why it makes sense to work with a professional or make use of payroll software. Specifically new businesses that don’t have much experience with payroll taxes, it’s usually safer to handle payroll taxes with at least some assistance.”
If reading that list made you nod (while cringing) in agreement, it might be time to consider outsourcing your payroll functions.
You can read the original version of this blog post here.