Due to the size and demands of the company, larger corporations have separate departments to handle processes including inventory management, bookkeeping, budgeting, payroll, and more. However, business owners learn quickly that they are limited with time and resources with these functions, especially small business payroll.
Payroll is one of the most time-consuming small business processes. Rushing through it could result in errors that could have an impact on your bottom line or open your business up to liability due to shortening employee pay. You may benefit from hiring an accounting firm to handle these tasks for you.
Nolan Accounting specializes in small business payroll, as well as other accounting tasks for small businesses in Southeast Wisconsin. Here’s what you need to know about small business payroll.
Small Business Payroll Defined
Small business payroll involves the process used to ensure that your contract and full-time employees are paid accurately and on time. Payroll helps you keep an eye on your cash flow, which is critical for a small business. Research shows that approximately 40% of small businesses located in the United States outsource their payroll to experienced professionals.
This process can be challenging for small businesses, especially if you have limited resources- but it is critical to ensure that your employees are paid on time for legal and staffing reasons.
Is it different for a corporation versus a small business?
There are some differences between payroll for a corporation versus for a small business. Most of the time, payroll is handled by the HR department in a corporation, whereas a small business usually doesn’t have an HR department. Instead, the business owner is responsible for these tasks.
Corporations often have a software program that allows the printing of checks or sending out of direct deposits. A small business often writes paper checks to its employees.
Why does your business need such a process?
Even small businesses need standardized processes in place to reduce your risk of making mistakes. There can be a lot of things to consider that can impact the amount that your employees get paid including:
- Some employees may be hourly, while others may be salary
- Payroll taxes
- Paid time off
- Sick days
Do you need payroll processes if you only have one employee?
Yes, payroll processes are critical, even if you only have one employee so that you can ensure that they are paid accurately and on time. Plus, it can help keep a paper trail and ensure that you withhold the proper amount of taxes.
When Should a Small Business Set Up This Process?
As a general rule, the process will be set up as soon as you hire an employee. Even if you only have a few employees, standardized processes are critical for ensuring that your employees are paid properly.
What to Consider When Choosing a Small Business Payroll Service
Most small business owners understand the benefits of hiring a payroll service. However, how do you choose the best one?
- Ask for a referral
- Look at online reviews
- Consider the costs of the service
- Consider convenience
Nolan Accounting can help with your small business accounting and payroll needs. We work with a variety of businesses in the Southeast Wisconsin area. Contact us today to get started with quality services to further your business’s success.