It was just a mistake. Those are awful words – and impactful words – especially when it comes to financial aspects of a small business. And when it applies to payroll, payroll taxes and the IRS, those words could mean the end of a small business.
It’s not just small business owners that shudder from mistakes. It can be entire state governments! Recently in Baltimore a mistake in the miscalculation of pay for overtime and night pay has the state reeling. Payroll workers in various state agencies made the errors –over a significant length of time.
The mistake was caught when a new payroll and timekeeping system was installed. To make matters even more precarious, the workers were union workers in police, hospital employees and corrections workers. The time frame was long enough that there are many former workers affected, too. They are now working with the unions to try to resolve the problems.
It can happen in your small business, too
As a small business owner, you can see the time, expense and aggravation that this mind of error can cause. How many clients and business opportunities would you miss if you had to resolve a payroll problem? How many employees would you lose if you had to tell them you had miscalculated their pay for months – or years? And if they leave, your reputation could be damaged as they reason for their departure becomes public knowledge. Even if it was an honest mistake, it could dog you, and your small business, for years.
That’s just the beginning, though. For a small business, there could be fines and penalties in connection with payroll taxes. And you would probably be well advised to contact a tax expert to help you wade through the situation between the accounting and the tax implications with the government and IRS. Yes, that adds to the cost and time.
This type of scenario is exactly why so many small business owners opt to outsource their payroll. We hear it all the time from The Payroll Department clients – they want another set of eyes and brains looking at the payroll. They want to have professional experts in payroll and payroll taxes watching over how payroll is being run and how their employees’ wages are calculated.
Create a business process that is effective and increases your confidence
By outsourcing the payroll processing, you are effectively creating a check and balance in this aspect of the financial picture for your small business. And, because it is an independent, third party who has an objective perspective and process, the potential for errors is reduced. That can make you sleep better at night, can’t it?
That peace of mind and confidence is well worth the expense of outsourcing the task to a payroll service like The Payroll Department. Contact Teresa Ray to find out more. It might just be less than you expected – and the best decision you can make this year!
-Elaine of The Payroll Department Blog Team