Taking care of payroll responsibilities for your company requires more than just keeping track of your employees’ hours. It’s a time consuming and often confusing process. This is especially true for small business owners who don’t have the experience or expertise needed to process payroll legally and effectively. If you’re overwhelmed by your agency’s payroll service and are considering outsourcing the task to an outside payroll provider, here are some tips on choosing the best service for your agency.
Do You Need a Payroll Service?
The first thing you should ask yourself when you’re considering taking the leap to outsourcing is whether or not you really need it. If you have a background in accounting, or someone in your firm does, you may not need to outsource.
However, even if you understand the ins and outs of payroll, you must also consider if you have enough time to continuously research legislature, keep on top of deadlines, withhold taxes, file quarterly reports, issue tax forms, and handle unemployment, leave, and disability assessments. If you’ve decided that you’re out of your element or simply don’t have the time to process your own firm’s payroll, your next step is finding the best service for your company.
If your cash flow is often in the red or unpredictable, you should consider engaging a payroll service that also offers payroll financing. Staffing agencies have an upside down cash flow cycle—having to pay employees before being paid for their services. That’s why agencies can greatly benefit from payroll financing. Your provider will finance your payroll so you can always have enough cash on hand to pay your employees on time, every time. With some providers, your investment can be protected with client credit checks and receivables insurance.
If you have an established firm in Canada, are considering expanding your foreign business into Canada, or you’re just starting out, you should choose a payroll service with Canadian expertise. The employment laws and tax requirements in the country are unique and it takes a provider that truly understands the intricacies of Canadian law to ensure that you’re always compliant. A provider with Canadian expertise can keep up with changing government policies and market fluctuations for you, so you can focus on your sales and service.
If you’re having trouble handling your HR administration tasks—either due to lack of time or lack of experience—you should consider outsourcing to a payroll service that also provides HR administration. Taking care of your employees requires more than just cutting pay cheques every other week. Onboarding, termination, policies and procedures, health and safety, the employment standards act, and many other HR responsibilities will need to be taken care of. This entails a lot of paperwork and know-how. Luckily, if you choose to engage a back office service provider that can take care of your HR administrative tasks for you, you won’t have to worry about any of it.
Before you choose a payroll service, consider how much you’re willing to spend. You’ll likely save costs by outsourcing your payroll since you’ll be saving yourself the time from doing it yourself or saving money from hiring a full-time bookkeeper. The back office service provider you choose should only charge you for the work that’s completed, so there are no hidden costs. However, costs and service options will vary, so you should consider your budget before making a decision.