It’s okay to admit it – payroll can be a real pain. As a small business owner, you’re trying to focus your efforts on growth and development, but confusing and time-consuming administrative tasks, like payroll, cause you to put a pause on everything and divert your attention.
You’re definitely not alone: In fact, the National Small Business Association (NSBA) found that an astounding “one-in-three small businesses report spending more than 80 hours [...] each year on federal taxes.” The same study also found that most small business owners believe that “administrative burdens are actually a bigger problem than the financial cost of federal taxes.”
At the same time, your team is your most valuable asset, so making sure they are paid accurately and on time is a must. But payroll is extremely prone to errors: Another study from the IRS shows that approximately ⅓ of businesses make payroll mistakes.
This not only leads to a lack of employee satisfaction, but also costly fees. The American Payroll Association estimates that 40% of small businesses end up owing money to the IRS to resolve payroll errors – costing them over $800 annually, on average.
The solution for many small business owners is to partner with a professional employer organization (PEO). A PEO like FrankCrum handles a company’s HR and administrative tasks and alleviates payroll burdens so that owners can focus on what matters most – their business.
What is a PEO?
PEO stands for professional employer organization, and is the term used to describe companies like FrankCrum whose purpose is to provide human resource and administrative support to businesses. A PEO partnership is a comprehensive answer to many small business woes: they provide access to healthcare and benefits packages, retirement investments, workers’ compensation insurance, HR support, risk management & compliance guidance and – of course – payroll solutions.
Common Payroll Mistakes
The margin of error in payroll management is pretty huge – here are a few of the most common payroll mistakes:
- Overpaying/underpaying an employee
- Missing payroll deadlines
- Making a mistake on your W2
- Miscalculating or neglecting to pay overtime hours
These errors are both costly and time consuming: in fact, one study found that small businesses could take up to 10 days to resolve a payroll error!
This is a big waste of your internal resources, who have to dedicate a significant amount of time to payroll error resolution, but it’s arguably even more problematic for employees who rely on timely and accurate paychecks to manage their personal finances. And when you’re trying to establish yourself as a small business, you definitely don’t want the reputation of being lax with your payroll practices.
These are just a few common payroll challenges, but unique scenarios and situations present countless more. Because of this, we recommend partnering with experts in payroll, like the ones you will find at FrankCrum.
Payroll Software vs. PEO
Today, there are a number of payroll software marketed as do-it-yourself, in house solutions to payroll management and organization. A lot of small business owners turn to these as a seemingly easy, inexpensive way of managing payroll for themselves.
Many of these tools are user-friendly and cover some of the basics of payroll management; however, they cannot replace the utility and support of outsourced HR services.
As previously mentioned, the payroll process is teeming with opportunities for error. Part of this is due to the fact that there are so many factors at play when it comes to correctly reporting and distributing payroll. A payroll software might expect you to be able to identify and report special circumstances yourself, but the full service payroll support offered by FrankCrum takes the guesswork out of the equation for you.
Our experts are versed in all of the factors that affect payroll, including employee, organizational, and legal challenges. Examples of payroll complexities include:
- Multi-State payrolls
- Certified payrolls
- Job costing
- Multiple pay rates
- Permissible deductions
- Per-diems and non-taxable reimbursements
The stakes are high when costly errors are on the line and, at the end of the day, a computer software cannot offer the specialized expertise and guidance that many small businesses need to facilitate continued growth.
Instead, partnering with a PEO service like FrankCrum offers small business owners reliable service and peace of mind surrounding their human resource management needs.
Benefits of a PEO Partnership
When you work with a PEO, payroll is one of the many facets of human resources that are taken care of for you. In fact, here at FrankCrum, we even offer our own HR Information System (HRIS) called MyFrankCrum, that grants employers access to an array of employee management tools including payroll, employee onboarding and applicant tracking, worker’s compensation certificates, and more.
A PEO partnership also gives you the opportunity to consult with a dedicated support team of HR experts. They can offer advice on a wide array of HR topics, and best of all, they will tailor their advice specifically toward the needs of you and your business.
Whether you have been in business for decades, or are just starting out, partnering with FrankCrum is a great way for your business to save time and money. From talent sourcing with our sister company FrankCrum Staffing to full-service HR support for small businesses, we have all of the tools and guidance you need for HR success. Contact us today to find out how FrankCrum can help you optimize your human resources administration!