Business owners have several options when it comes to who handles payroll; they can do it themselves, delegate those duties to an employee, or opt for the increasingly popular option to simply outsource payroll to an online payroll service.
There are pros and cons to using each of these methods, so be sure to do your research and decide what is most important to you when determining what you will use. To help get you started, here are the pros and cons of using an online payroll service:
Pros of Online Payroll Services
1. Efficient & Cost-Effective
Using an online payroll service can decrease the amount of time you spend on payroll from hours to mere minutes. Because of this, you (or one of your employees) will be able to complete several other tasks in the time that would have been normally spent calculating pay, taxes, and more, which saves you both time and money.
2. Easy to Use
Most online payroll services are designed to be user-friendly so that new users can master the process very quickly, thus greatly reducing the learning curve. So, even if your designated payroll manager leaves suddenly, it won’t take you long at all to find and train someone new to handle the task.
If you or one of your employees handle payroll yourselves, you will probably end up making a few mistakes throughout the process. It happens! Unfortunately, the IRS will not forgive those mistakes and will penalize you for them. Yet, if you complete your payroll services online, you can rest assured knowing that your taxes are being handled by experts who are going to make little to no mistakes.
Cons of Online Payroll Services
1. Less Control
One of the biggest downsides of using an online payroll service is the lack of control that you may feel. You will still be able to view and access all of your employee’s payroll details, but it can be a tough adjustment if you are accustomed to doing all of your payroll in-house.
2. Security Concerns
Data security is always a concern because you don’t want all of your employees’ information being compromised. Different online payroll services have different security measures in place, so you will have to do your homework and figure out how exactly they are going to keep your information safe. It may help to speak with a current user of the service to see what their experience has been like.
3. More Services Than You Need
The payroll needs of small businesses are going to be different than those of larger ones, so you will want to watch out for online payroll services that try to tack on extra services that your business may not want or need. Some payroll services do this to make their services more convenient for customers, but you could end up wasting a lot of money if you don’t pay attention to what services you are actually paying for.