Payroll accounting entries are one of the most common mistakes small business owners make, and for good reason. Payroll is complicated, and the entries can be confusing. Add in the administrative tasks of filling and filing forms, staying up-to-date on law changes, and remitting all of the various things you’ve withheld, and it quickly feels like a full time job.
What is Payroll Accounting?
When we say payroll accounting, we mean the things to do before and after regarding payroll. The payroll has been run and happy employees have received their net check or direct deposit. But your job isn’t done yet. Taxes and benefits have been withheld, but they need to be remitted. Accounting records must be updated. And the various payments need to be classified when they clear the bank. Sometimes they even need to be manually separated, since the bank takes them in weird chunks. Gross wages, net paychecks, Federal and State taxes, payroll taxes, and more need to be accounted for correctly on the balance sheet and profit and loss statement.
Benefits of Payroll Accounting Services
Gain focus on core business functions
If you’ve made mistakes entering your payroll accounting entries, your financial statements are wrong. Let’s say you’ve deducted all of the federal and state payroll taxes you remitted on top of the wages you paid. You’ve double-booked expenses, causing your net income to appear lower than it actually is. Using that for tax planning purposes means you could be underpaid on taxes and face penalties.
Trust the experts to record everything correctly, and use those accurate financials to make better decisions.
Save time & increase efficiency of payroll function
Everything takes time. If you haven’t already, track how much of your time is spent on payroll. Don’t forget all of the forms you need signed and submitted, updates as employees want to change withholdings and benefits, researching new payroll laws, updating your system and rates as necessary, and more.
You’ll find it’s a lot of time, no matter how many employees you have. Working with an expert helps streamline the process, takes work off your plate, and frees up time.
Provide employee support for payroll and income questions
Who do you turn to when employees ask you financial questions you don’t know?
You and your employees need answers fast, and professionals can deliver.
Reduce staffing costs
If you agree with everything above you may have already hired your own in-house payroll specialist. But could you save money by outsourcing to a professional firm for a fraction of the cost, and reduce your FTE’s?
You probably don’t have enough work for a full-time payroll specialist, which means you’re wasting money.
Easily scale staff when needed
Let’s say you do have enough work for a full-time payroll specialist. What happens when they’re too busy, but you’re growing? How can you quickly scale your operations with a payroll bottleneck? How long will it take to hire and train additional people, and can your cash flow support it as you wait to grow?
Outsourced payroll firms work in teams, and can quickly allocate resources as needed. They kick into overdrive, but you don’t notice any difference as you continue to receive great service.
Use HR Support functions
Do you also employ an HR professional? If not, who do you turn to when you have HR issues? These issues can’t be ignored, and the penalties are steep.
Working with a payroll provider that partners with HR professionals is the perfect answer. Receive on-demand support and expert guidance at a moment’s notice, without the overhead cost.
Maintain employer compliance with laws and regulations
As a small business owner, you know the responsibility falls on you to comply with all laws and regulations. That can lead to a lot of stress, especially if you lack knowledge in the areas of payroll, accounting, and tax.
Working with a firm of professionals alleviates that stress. Rely on them when you’re at a loss, and trust they’ll set you up for success.
Avoid fines and fees thanks to expert guidance
Have you ever missed a deadline to file your quarterly payroll tax returns, or submitted W-2’s late? Have you received notices from insurance agencies and financial corporations for failing to remit withheld benefits on time?
It can be easy to miss a deadline when it all falls on you and there are a hundred other things on your mind. Leave that work to a professional and save yourself from late fees and penalties.
Working with Haworth & Company, Ltd.
We’re happy to be the one-stop-shop for small businesses in Minnesota, and that includes payroll and payroll accounting services. Hundreds of small business owners in the Twin Cities and Rochester have trusted us to look after them, and they’ve been happy with the results. Less time spent on accounting, tax, and payroll means more time spent running the business they love. We’ve also partnered with 401(k) and HR firms to provide the wide range of services you need at tailored prices you can afford. Check out our EZ Payroll page to learn more, and contact us today!
Disclaimer: This blog content is for general informational purposes only, should not be considered professional advice, and does not establish a client relationship. Haworth and Company is not liable for the accuracy of this information or the content of external links. Please use this information at your own risk, ensuring it suits your specific needs, and consult with a certified tax professional for your own personalized guidance.
