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Understanding the Basics of Payroll Services: How They Work and Why You Need Them

A company's payroll system holds everything together. If employees are not paid on time or correctly, business operations and the workers suffer. Relationships are damaged, and payroll penalties, fines, and lawsuits can result. Professional payroll services help small businesses build and manage a seamless payroll system that employers and employees alike can count on week after week.

Understanding the Basics of Payroll Services: How They Work and Why You Need Them

How Do Payroll Services Work?

No matter who is in charge of payroll in your organization, taking care of the numerous small payroll details is likely not the most enjoyable aspect of a job that people usually enjoy. Ineffective payroll systems not only steal your time; they add stress that can impact other aspects of your job performance. Payroll services free you (or someone else) from monotonous payroll tasks. They enable leaders to focus on developing star employees, cutting wasteful spending, and running a business environment where employees want to work daily.

To accomplish this, payroll experts evaluate your business needs and work with you to set up an effective payroll system. This includes reliable payroll software and the ongoing support of expert payroll professionals who manage the tasks you outsource to them (or your payroll as a whole). This more seamless system ensures payroll task completion is timely and accurate—every time.

Types of Payroll Services

Payroll services manage the minute details of payroll, such as:

  • Tracking employee hours and overtime
  • Calculating employee wages
  • Deducting payroll taxes
  • Properly allocating payroll benefits
  • Accurately reporting "fringe benefits" as income or not.
  • Handling direct deposits and/or cutting checks
  • Ensuring payroll compliance with state and federal law
  • Overseeing worker's comp (at least the payroll part of it)
  • Applying 401(k) contributions to the company's retirement services provider
  • Implementing software to track employee hours, attendance, and any paid leave associated with
  • Automating everything that can be done to eliminate repetitive tasks and reduce the chance of error

Implementing Payroll Software

Payroll automation and management software are vital to a modern payroll system. The software automatically populates information everywhere it needs to go, so payroll stays up-to-date across payroll processing tools you may use.

For example, manual time-tracking processes significantly drain your time and resources and are a hassle for employees. What worked when you had a hand full of employees no longer works as you grow your business, and failing you scale your clock-in procedure to current business needs can stifle growth.

A cumbersome, manual time-logging system leads to a greater divide between actual hours worked and those you end up paying. More employees will either carelessly misreport or actively game the system because no checks and balances exist.

Payroll services can set up easy timekeeping systems with badges, codes, or even fingerprints for greater accuracy and integrity.

This clock-in information goes straight to payroll software that detects potential anomalies. A payroll expert can review these discrepancies to determine if they indicate inaccurate reporting. These can provide much-needed proof for employee discussions in addition to enhancing productivity.

Why More Small Businesses Are Outsourcing Payroll Tasks

Small businesses realize they spend too much time manually processing payroll. They have outgrown their startup payroll software and have noticed that, even with it, they still have to cross-populate information between poorly integrated software.

With payroll support from a professional payroll service provider like Exact Payroll, small business owners no longer have to spend hours or days a week in the office checking and double-checking these numbers. They are finding that professional payroll services save them time and money they can invest in growing their companies. With reliable payroll management, they can build a work culture where employees know they'll always be paid the right amount on time, every time.

You can be sure of your payroll compliance and stay up-to-date all year round, so tax time becomes much easier too! It's easier to run reports when you already have all the information you need in one place.

Small business payroll processing is changing how these companies manage finances for the better.

Transform how your small business does payroll and experience the benefits for yourself with Exact Payroll. Schedule a brief discussion with our highly trained professionals today and take the first step towards a better payroll experience.

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