Running your own business can be extremely taxing. You are chronically strapped for time and even if not, you are low on energy, which is why it is essential that you learn to manage your resources well early on. Things can get hectic and get out of hand before you know it.
But it is possible to prioritize tasks and use your time more wisely by focusing on the more demanding task. For instance, delegating non-essential functions to professional payroll services in San Diego, CA can go a long way in saving you precious time and money in the long run.
Still, in an effort to establish a streamlined business process and maintain control over both essential and non-essential business functions, many small businesses owners prefer to keep payroll in their hands. This begs the question: does it pay off to do payroll by yourself?
Can I set up my own payroll?
If you have the time, you can set up and run your own payroll. There once was a time when payroll was done manually, using nothing but a calculator as there was no way to automate it.
But now that we have the option to automate the payroll process, running your own payroll may not be the best option in the long run.
In addition to gathering information needed for your initial payroll and tax processing and setting up a payroll schedule, you will need to create your own payroll system and do the following with each pay period:
- Calculate hourly schedules and overtime pay, as applicable
- Calculate gross pay
- Calculate and subtract deductions from gross pay
- Calculate net pay
- Issue payment
- Keep payroll records and update them promptly
- Prepare and pay taxes
How do I do payroll for my small business manually?
If you want to do your payroll manually, you will first need to learn about payroll and payroll taxes. The possible learning curve may require a considerable time commitment on your part.
You will save money as you will not have to pay a professional to do it or even purchase a payroll software. However, you will need time to learn how to do it and double-check all your calculations if you want to spare yourself the risk of errors and fines.
While doing your payroll manually allows you to retain full control over the process, it also takes a lot of time, whether it’s doing the calculations, distributing wages or preparing and filing taxes. It will take you some time to get used to that. After all, we are no longer used to doing anything by hand as technology has become an indispensable element of our daily lives. Ask yourself if working on payroll instead of on the business itself is really the best way to use your time?
What are the possible challenges of doing your own payroll?
Processing payroll includes keeping and maintaining records of any and all information regarding compensation of the employees, including wages or salaries, bonuses and other earnings.
You will also need to withhold payroll taxes (state income taxes, federal income taxes, Social Security and Medicare taxes), the employer’s share in the employees’ payroll and unemployment taxes and the employees’ own share in medical insurance premiums, savings plans, garnishments, if any, etc.
Last but not least, you will be required to calculate the employer’s expense of fringe benefits, including health insurance, dental insurance, paid leave, including vacations, holidays and sick absence leave, as well as workers compensation insurance and savings plans and pension contributions.
Doing your own payroll comes with a series of other challenges for which you will need to prepare in advance:
- Keeping track of changes to local, state, and federal payroll taxes
- Setting up and maintaining a data management and reporting system
- Preventing errors and costs
- Adjusting your schedule to leave time to manage and run payroll
- Maintaining compliance
What are the advantages of hiring a payroll service provider?
If you want a solution that combines reliable expertise in managing payroll with a minimal investment of time and a reasonable investment of money, outsource payroll to professionals.Below is what you stand to gain from hiring a payroll service provider:
- Limit distractions
It is not easy to stay productive all day long, day in, day out, if you are surrounded by distractions. By having professionals handle your payroll, bookkeeping and business taxes, you will have mor time and energy to focus on your own business.
- Avoid IRS penalties
Unsuspecting, unprepared small business owners often get penalized by the IRS. The key reason? Payroll errors. However small and insignificant these errors may be, all the fees and fines can easily grow into
- Save time
Wrapping your head around the intricate and complicated payroll system takes concentration, patience and time. Put precious time and energy into your business instead of on figuring out the payroll system.
- Reduce daily stress
Lack of experience in handling payroll can lead to legal mistakes, errors, and frustrating do-overs. All these things are stressful, they drain your energy and rob you of precious time.
- Keep track of finances
If you are new to business ownership, you may find it hard to keep track of your finances. A payroll service can help with that, by helping you develop a better understanding of your finances and make forward-thinking choices accordingly. While doing payroll centers on computing pay, withholdings and deductions and managing the tax filing process, it is part of a comprehensive finance management support system.
Schedule your comprehensive payroll services in San Diego, CA
We can help you make the most effective use of your working time by catering to your business needs: we can help you set up your business, do your business taxes and perform a full scope of ongoing bookkeeping and payroll services.
Whether you are just getting started or have ample experience in entrepreneurship, David York’s Tax Service is a provider of payroll services you can fall back on every step of the way. We serve the city of San Diego and all the communities in San Diego County. Call to schedule your first appointment today!