Some small businesses may choose to outsource their payroll work to a payroll service provider than doing it in-house. One advantage of outsourcing is that it saves time and takes the pressure off the Human resource department. The company can spend this time focusing on business decisions that benefit the organization.
If you are using a payroll service, all you have to do is provide them some basic information such as employee names and their service hours. The payroll service will take care of the rest. Here are some of the advantages of choosing a payroll services
- You no longer have the responsibility of interest and penalties that may incur if the reporting is incorrect as the payroll service provider is responsible for it.
- Since payroll service providers have the system and resources to manage functions accurately, the chances of error are low.
- There are multiple features that a payroll service can provide you in a package which you may not have access to otherwise.
We have discussed the features in detail further on, but let’s first discuss how you should go about selecting a payroll service.
Selecting a Payroll Service for a Construction Business
- Construction businesses may have to work with the payroll service directly because of the nature of work. This is because new employees are constantly added and there is a difference in the types of employees working in a construction business. It is best to do your research before making your decision. - Some payroll service providers are good at dealing with mid and large-sized organizations. Make sure you select one that can cater to your needs and has flexibility, attention to detail, and provide a safety net.
- Have a look at the features provided by the vendors. You may need custom reports and certain system integrations.
- Price is another factor that you need to consider while selecting a service. Make sure you are aware what you’re paying for
- If the vendor is located close to your workplace, it will help you reach out to them and you will have someone servicing your account nearby
- The vendor also needs to have knowledge of the industry so that any issues that occur can be taken care of.
- Payroll servicing is an unregulated industry and payroll company theft may be a concern to you. Choose a vendor where you are protected against losses and if possible, get a copy of their insurance declaration
Employers should enter their worker data as early in the year as possible. This will leave less work to be done by the payroll service provider. Most vendors charge a very small fee for starting but take care of most of the work for businesses.
The link between benefits and payroll
A good payroll service should be able to calculate benefit deductions for whichever insurance provider you are using. Choose a service that provides you with the best insurance offer. Apart from that make sure they also offer you the best premium rates and customer care. Additionally, you should also have deductions determined by your payroll company.
Should you choose a PEO instead of a Payroll Service?
If you want to outsource the management of Human Resource Functions, Professional Employer Organizations (PEOs) are an option. They are not the same as payroll companies and require you to put yourself and your employees on the PEO’s payroll. These organizations not only write paychecks but are also responsible for making payroll tax deposits and filings. The employers have to pay the PEO monthly so that costs of payroll, taxes, insurance, and other benefits can be covered.
Although PEOs are convenient they are expensive. They will charge a percentage on the gross wages and earn money off the discount after consolidating insurance and other benefits. It is possible that a PEO may put you in the category of large companies which will make you liable to requirements such as the Family Medical Leave Act, adding to your costs.
Payroll Service Features
-Most payroll companies have the ability to deposit employees’ net wages through electronic direct deposit.
-They provide you with labor distribution reports that categorize payroll expenses by the job type.
-The reports also provide you with the segmentation of expenses as per the job, client, and departments.
-Under the prevailing wage laws, contractors and subcontractors are supposed to submit certified payroll reports and Statement of Compliance. A payroll vendor can assist you with these requirements.
-If an employee is paid different rates because they are involved in various types of labor while on the job, payroll service is qualified to handle that as well.
-Some payroll vendors allow you to report the payroll hours from an internet-enabled terminal. This helps employers to run their own payroll reports quickly.
-Employee Self Service is a feature where employees have the ability to access paycheck copies and W-2 information. In a few cases, they also have the ability to make changes on their own without the intervention of another party.
-Unlimited deductions for sick leave, multiple vacation types, and privilege leaves are something that can be easily handled through a payroll service. Other than that there are also deductions such as health insurance, retirement plans, and worker’s compensation that employees can provide to their employers.------Time and Attendance can be easily exported to the payroll’s system without having to manually enter the information.
-Some payroll services pre-print your checks in case you are not physically present to do so yourself.
-The payroll service is also able to aggregate various pay types such as basic salary, commissions, and bonuses in an accurate and timely manner.
The selection of features is a key part of shortlisting what vendor you want to work with. If you’re not working on certified payroll at the moment, it also helps to keep contacts in case you want a contract you may want to bid on in the future. Choose a vendor who has experience in processing payrolls and can serve you well.
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