Payroll services for small businesses vary and it could be difficult to decide which ones will best suit your needs. From choosing between in-house payroll to outsourcing; and thinking about which types of features you’ll need, you may feel overwhelmed with all the decisions.
A mismanaged payroll means a headache for you down the road. To ensure this problem doesn't happen to you, this article can offer a better understanding of what each type of payroll service can do for you.
Processing payroll in-house would give you control over the entire payroll operations, so you get to oversee where your money is funnelling. Essentially, in-house payroll is when a business employs an internal team to process their payroll. This means your business’s payroll team would handle all steps of the process – from preparing and double-checking remittances to submitting them. Normally the payroll team is a part of the HR or finance department.
Besides having more control, here are some other benefits of in-house payroll:
Submitting remittances can be stressful when you're required to give them to an outsourcer who needs them a day in advance. When you use an in-house payroll system you can submit remittances yourself without worrying about submitting them early.
QuickBooks Online automatically calculates your deductions, and allows you to submit them right inside the app - it will be as easy as paying a bill.
With an outsourced payroll provider, any adjustments that you need to make generally must wait until the following pay period to be fixed. An in-house payroll provider can run an off-cycle pay adjustment to address any discrepancies, remitting the correct amounts, so long as the payment is made by the CRA’s defined due date. You can also set up automated notifications and alerts so you don’t forget to make important payments.
Processing payroll in-house also provides greater flexibility with T4s and year-end tasks. For example, in-house staff can ensure all T4s are correct before being processed, rather than being told last minute to generate them.
A flexible in-house payroll solution will also have a robust system to cover all business situations, like having new earnings for new boxes, or providing tax slips for employees that use special boxes. The option for special boxes is a key feature for diverse businesses with complex needs. Since a great in-house solution should be configurable to meet all of their requirements, this is not a one size fits all situation.
Using a payroll system that is in-house also allows you to balance your CRA remittances by managing your own deposits, remittances, and programming.
Once your in-house team collects all payroll information, they can compare remittances of what was submitted versus what should have been submitted. Such remittances will highlight if all information in employee boxes is balanced with their T4 summary.
Outsourcing payroll means handing over processing to professionally trained experts and accountants to free up more of your time for other business-related needs. Once payroll is set up, these professionals will function as an extension of your business, covering all payroll processing and reporting tasks, including covering tax deductions, meeting all government deadlines for remittances, preparing payroll for year-end, and handling pay-related inquiries from employees.
That being said, it is still up to you as the employer to ensure accurate employee information and time sheets are submitted to the outsourced team on time. Outsourcing payroll also allows you to review payroll expenses for a pay period, and check reports to determine your labour spend.
Here are some essential payroll software features that will improve your process:
Businesses can operate at any time, making a flexible payroll time tracking system a must. With QuickBooks Time, businesses can:
Direct deposit is another must-have payroll feature. Since the main objective of payroll is guaranteeing employees are paid on time, direct deposits efficiently streamline the entire process. As a result, businesses save money and time on not having t print and distribute paycheques to every employee. At the same time, employees have an easier time receiving their paycheques online, saving stress and the environment.
Properly filing your taxes is crucial to keeping a successful business, hence why quality payroll systems offer tax filing features. Since manual calculations take time and are prone to human mistakes, calculating taxes using software will decrease the chances of mistakes and avoid penalties from the federal or provincial government.
The proper management of employee compensation goes far beyond standard payroll management. You must account for non-traditional methods of pay, as worker’s compensation, minimum-wage adjustments, and bonuses are handled using compensation management features. Such functionality ensures non-traditional payment practices are covered, so your business received an extra layer of assurance.
Most business softwares comes equipped with reporting features, and payroll is no exception. Reporting is an essential tool for businesses as it provides insights into payroll expenses. Since payroll reporting provides an in-depth overview of the business’s budget, taxes, workers compensation and insurance and other data, this tool reveals trends thats can be used by HR and accounting to improve operations and remove redundancies.
Reporting is especially useful when your payroll software allows you to integrate with other apps or softwares. This way you can compare your payroll reports to other sections of your business to gain a bigger picture.
A study finds that over 40% of the payroll administrator role could be automated over the next five years. This is because payroll automation is just quicker and more efficient at handling the payroll process.
QuickBooks helps streamline payroll processing for all types of businesses by automating financial tasks and more. Improve your efficiencies and place more time back into your business where it needs it most. Try QuickBooks Online today.
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