Page 26 - INC Magazine-November 2018
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Inc. Branded content / Hr
returns, there is no leeway with payroll payroll process that keeps up with
taxes. If you submit your forms late, regulatory changes can have a real
the meter on interest and penalties and lasting effect on the success of
starts running immediately. “It can add a small business, in particular,” says
up quickly,” Meller warns. In fact, late John Cumbee, general manager at
filing can result in a triple whammy of SurePayroll, a Paychex company.
penalties—for failure to file, failure to “Missing a payday is a sure way to lose
deposit, and failure to pay. They can add employee trust and confidence. It’s
up to an additional 30 percent or more also worth noting that for the average
of your tax liability, and both federal and small business, every dollar counts—
state filings are subject to them. and payroll penalties can result in
thousands of dollars in fines that can
refocus cripple the bottom line and put the
on your Business business in jeopardy.”
Even midsize businesses with
Many SMB owners are not aware dedicated HR professionals lose time
of the significant amount of and money on in-house payroll and
administration and recordkeeping non-strategic HR functions. A 2017
involved with processing payroll. Paychex, Inc. survey found that HR
“Due to the impact payroll has on professionals spent an average of 11
the business and every one of its hours per week processing payroll,
failing to implement employees, those recurring tasks are 4.9 hours processing employee
a consistent payroll a priority each pay period and have benefits, and 1.8 hours managing
process that keeps the potential to delay other mission- time off. “Assuming a 40-work week
up with regulatory critical work,” says Tom Gearty, and an annual salary of approximately
changes can have a real senior vice president of traditional $98,000, this equates to more
and lasting effect on employment solutions at Insperity. than $41,000 paid to manage the
the success of a small “A significant advantage of sourcing administrative functions of payroll
business, in particular. payroll to an external provider is the and payroll-related tasks,” notes Mark
John Cumbee, General Manager ability to maintain focus on growing Bottini, senior vice president of sales
at SurePayroll the business.” at Paychex. “Imagine those resources
allocated to tasks more strategically
hether you have one oriented toward business growth—like
or 1,000 employees, attracting and retaining top talent.”
wthe size of the business The argument for outsourcing
doesn’t necessarily change the non-strategic payroll administration
level of complexity involved, and functions is strong, and it’s only
repercussions from missteps in this getting stronger, Gearty points out.
area can be wide-ranging. “Most “In addition to federal and state
people think of payroll as the process withholding changes, increasingly
of issuing paychecks and a year-end more municipalities have been
W2, but that is only part of the payroll seeking approval to impose their
function,” Meller says. Employers must own taxes on employer payrolls. The
also file monthly or quarterly reports burden placed on a business owner
with the IRS and state tax agencies, to stay in compliance is growing
and money must be transferred quickly, and a mistake of enough
from the business to the appropriate magnitude could prove extremely
taxing agencies on a regular basis. painful.” Consequences could
Miscalculations on those payments include significant penalties, a lien
could end up triggering interest and on the business, and, in a worst-case
penalty fees at the end of the year. scenario, “untimely business closure,”
“Failing to implement a consistent he adds.
