Pros and Cons of Payroll Software versus Services

Choosing between Payroll Software and Payroll Services is a tough choice every business owner has to face at some point. There are three main methods of running payroll for the small business owner: manually, a DIY software, or a payroll service. While manual is not recommended, payroll software and payroll services each hold their own pros and cons making your payroll processing method a personal business choice:

Payroll Software Pros:

  • Control- you have control of all the details of running payroll, creating and view reports, and paying employees and payroll taxes.
  • Cost- usually less than you’d spend on payroll services.
  • Time Savings- compared to manually running payroll, you save a lot of time with software.
  • Security- someone hacking in and stealing your payroll information is less likely when you have control.
  • More data- you have easy access to any and all payroll data at any time.

Payroll Service Cons:

  • Time- running payroll takes time. If you make a mistake you could spend a lot of hours trying to fix it.
  • Staff- it takes time AND manpower to run payroll. Depending on your company size or complexity, payroll can take a lot of manpower to run in-house.
  • Errors- In-house payroll accuracy cannot be guaranteed so you are more at risk for IRS penalties.
  • Up-front Investment- some payroll software come with a hefty price tag. Annual fees are something to take into consideration too when evaluating overall cost.
  • Learning curve- DIY software can be complex and the learning curve could be steep.

Payroll Service Pro

  • Time savings- You save a lot of time in comparison to manual methods and payroll software.
  • Free Up Staff Time- Payroll services opens up more time for employees to focus on other areas of your business.
  • Cost effective- Payroll Services are cost effective for many companies after you add up the software costs and the staff costs to run it.
  • Accuracy Guaranteed- Payroll services often guarantee accuracy of their payroll processing which reduces your liability for mistakes.

Payroll Service Cons

  • Cost- Payroll Services often cost more than payroll software methods
  • Less nimble- You don’t have access to as much data as you want, when you want it.
  • Less control- you sign up for a service with set offerings.
  • Expectations versus reality for service- might not be the same.
  • Data security- although companies put a lot of effort into data security, it is more at risk when outsourcing.
  • Initial cost- Set up costs for services can be expensive.
If you are going back and forth between Payroll Software or Payroll Service, give us a call at 800-444-9922 and we are happy to help you with that decision!

 

Business Strategy From the Inside Out

When you think about strategy for your business you might think about your product offerings, adding or discontinuing products, streamlining production or service processes, adjusting prices or features, or venturing into new target markets. Those are all absolutely essential to stay competitive in today’s ever-changing market.

However, have you ever thought about some of your in-house processes like payroll, accounting, HR, or time keeping and how that effects your bottom line? Even altering your in-house administrative processes can be a positive strategy for your business. Evaluating rate of payroll errors, accounting slip-ups, or inaccurate time-keeping can take both a toll on your company’s time and money. You might be able to reduce errors (and the cost of errors) by implementing a new system or process or even outsourcing.

Increasing that internal efficiency and accuracy only frees up time and money for your outbound strategies to continue to grow and flourish in the future.

 

 

 

Happy National Payroll Week!

It’s National Payroll Week! With 156 million wage earners and payroll professionals, there are plenty of reasons to celebrate! CheckMark, Inc. is proud to support small business owners with their payroll and accounting for 30 years!

Here are some ideas on how to celebrate the week:

Source: National Payroll Week

The History of Time Clock

The first time clock was invented in 1888 by Willard Le Grand Bundy, a New York jeweler. A year later, his brother, Harlow Bundy, formed Bundy Manufacturing Company which started mass producing time clocks. At that time they were mechanical machines.

By the late 20th century, time clocks switched over to electronic or computer-based time clocks. Some common types included: magnetic strips, RFIDs, and barcodes. Many systems even allow employees to request vacation or view their hours worked through the system. Smartclocks include technology similar to smartphones, with biometric components available to prevent “buddy clocking”.

CheckMark offers a large variety of different time clock solutions including biometric options. To figure out which type is right for your business, request a quote today.

Info from Wikipedia

10 Signs You Should Invest In Payroll Service

Payroll doesn’t have to be hard. Payroll Software fits the bill for many companies and is a great and affordable option for them. However, it doesn’t fit the bill for all. If you’ve struggled with any of these 10 signs, consider contacting us for a free payroll services quote and let’s see if we can help you out!

1.      I don’t have time for payroll! Payroll Services is a quick and easy submission of hours every payroll period. Your payroll specialist handles the rest. No more midnight troubleshooting.

2.      I don’t know a thing about payroll. If you are totally clueless about payroll, it might be best to leave it to payroll specialists.

3.      I need to focus on the core of my business. No shame there. Payroll is easy to take off your plate.

4.      Complicated tax structure.  So you live in one of those places that has what feels like a bazillion local and state taxes with all these different rules. Well, you can make that someone else’s problem.

5.      When are taxes due? IRS loves late payments…means extra income for them!

6.      I’m not organized. Payroll and payroll taxes require good organization to be accurate and timely.

7.      It’s the bane of my existence! If you hate it, might as well pass it off to someone who likes it and spend more time doing what you are good at and enjoy.

8.      Payroll taxes are daunting and stressful. You aren’t the only one. They also don’t have to be stressful to you.

9.      Paying employees is stressful and confusing. Taxes, deductions, additional income, vacation…they all add up!

10.   I’m worried about IRS penalties. No one likes penalties. Payroll Services assume the liability if they make a mistake.

Learn more about our Payroll Services or ask for a free quote today!

The History of Payroll Taxes in the United States, Part 2

From 1913 on, tax law significantly expanded to include corporate and individual income taxes. 1918 saw additional expansion to include foreign tax credit and more income and deduction items.

1926 saw Title 26 come to be which formed the Internal Revenue Code and the US Code which included things like gift and estate provisions. The IRS was reorganized in 1954 to the IRS we know today.

WWI saw federal taxes expanding. Andrew Mellon who served as Secretary of the Treasury and was quite a wealthy businessman  suggested that income tax reduction could spur growth. Multiple cuts were made, the last was the year before the Great Depression hit in 1929. Income taxes were raised again towards the end of the Depression and WWII and then reduced time and time again in the following presidencies. Bush’s second presidency also featured big cuts for corporations and the wealthy.

1986 saw a thousand pages of new IRS Code which included lowered tax rates, new international rules, lowered capital gain taxes, and much more. Not surprisingly, the tax code has been modified 34 out of 97 years(1913-2010)!

What will the future of payroll taxes hold?

Research from Wikipedia.

The History of Payroll Taxes in the United States, Part 1

The United States currently has one of the most progressive tax systems in the industrialized world…but it wasn’t always that way. Currently, taxes from all sources (federal, state and local) add up to 24.8% of GDP and are based on net income of individuals and corporations.

Before 1776, taxes were paid to the United Kingdom by the Colonies who also imposed local taxes. Originally, when the United States was formed, the Articles of Confederation did not give the federal government the power to tax and left that to the States. However, in 1787, the US Constitution did give the federal government that power BUT a portion of those taxes had to be given back to the states based on population. Tariffs were the primary form of taxation during this time and throughout the 1800s.

Property taxes became the primary source of tax income, however a shift needed to occur to tax intangible property such as corporate stock…

In 1837, some states added income and property taxes. (In 1911, Wisconsin became the first to adopt individual and corporate tax). The Revenue Act of 1861 allowed a federal income tax until after the Civil War but was then found unconstitutional. It wasn’t until the 16th Amendment in 1913, that the federal government was granted the power to levy income tax on both property and labor and included corporate and individual income tax.

Next week: Payroll tax’s journey from 1913 to present day

Research from Wikipedia.

How do I comply with the Reporting of Employer Sponsored Health Care on my W2s?

How do I comply with the Reporting of Employer Sponsored Health Care on my W2s in my CheckMark Payroll Software?
Note: This reporting is NOT required for 2011, but will be mandatory for certain employers starting in 2012. For more information, refer to the IRS Notice 2011-28.

Continue using your Health Insurance deduction for the employee as you normally would. The reporting of the Employer Sponsored Health Care will not change what you are currently doing with your employee’s insurance AND this amount you’re reporting for the Employer Sponsored Health Care is NOT taxable and the values are NOT included in the employee’s taxable income.

Set this up at Year End:
1. Setup an Additional Income category as a Fixed Amount (0.00), Omit from net and exempt from ALL taxes. Check Box 12 and enter Code DD.
2. Assign the income to all employees that receive this benefit and enter the amount paid by the employer for each employee under the YTD tab at the end of the year..
It will show on the W2 in Box 12 with Code DD – it does NOT show on the W3.