Starting your own business really requires a lot of work. Unlike when you work with independent contractors, wherein you simply write checks to pay them without the responsibility of paying taxes, you’ll be required to follow bunch of rules set by the government if you decide to set up a business seriously. And worse, if you don’t comply with the rules or you miss a deadline, you will face consequences and penalties. But of course, all of those can be avoided if you will set up an effective payroll.
A payroll, as we all know, is the sum of all the compensation that employers must pay to its employees. These include the salaries, bonuses, and deductions. It plays a major part in the success of a business. Without an effective payroll system, you’ll never be able to pay your employees appropriately, calculate the right amount you need to pay to the tax authorities, and determine how much your company is really making.
Well, there are three basic ways for doing payroll: you can do-it-yourself (manually), install a payroll software solution, or outsource it (delegate the task to independent, professional accountants or service providers). All these options are great because they all have advantages. But of course, just like anything else, they, too, have set of disadvantages.
For instance, doing the payroll yourself can save you a lot of money. This is great if you’re start up and don’t have much money to start with. However, doing it on your own can be too exhausting because payroll requires a lot of work and calculation. After all, you need to have enough knowledge in accounting if you decide to do it on your own. If you’re not knowledgeable, you will likely to overlook a lot of things, which could result to incorrect data and penalties.
If you decide to install a payroll software solution, you will get the benefit to process your payroll automatically, which means you no longer need to learn the complicated process behind accounting. Most software available in the market today are user-friendly, which can be used by almost anyone. But the downside is the installation and maintenance of the software, which can be expensive. This is not to mention the cost that you have to pay for the training of the staff, who will maintain and track the payroll process. While most software systems are user-friendly, you still need to train staff to ensure that the system is doing its job correctly.
Well, if you will ask me, I guess the best option among the three, despite also having some drawbacks, is to hire a professional service provider. While it can be expensive at the beginning, outsourcing can be cost-effective in the long run. When you outsource, you can assure that your payroll is managed and processed effectively because these professionals are trained and educated well to perform the job. They also use the latest and most effective software systems, which no longer require you to pay and train another staff. The cost of hiring a professional accountant or service provider may vary. If you want to know more information about the cost and other benefits of outsourcing, visit payrollserviceaustralia.com.au.