You love running your business. It provides opportunities to expand your skill sets and turn what you love into a career. So much greatness has come from owning your own company. Yet, the reality of running your business is not quite what you imagined as many aspects are simply outside your comfort zone, particularly when it comes to payroll.
What’s important to remember is that payroll is critical to the success of your business as this helps to keep your employees happy and committed, not to mention keeping you in Canada Revenue Agency’s “good books.” Without this, your business is going to show the effects, such as lack of customer care or service, an increase in “sick” days from employees, and negative attitudes when they’re there. But, how do you know if working with a payroll service provider may be the next step for your business?
Tell-tale signs it’s time to outsource payroll
If you are focusing more of your time on payroll than you are on the rest of the business, this is likely an indicator that you may need support. Other tell-tale signs we’ve discovered with our clients include:
- Incurring penalties or interest
With payroll, you need to send a monthly remittance to the CRA by a specific date. CRA is quite religious in following up if they don’t receive this remittance by the stated date. If you’re late by even one day, you’re going to be charged penalties. And, while you may have a very valid reason for submitting your remittance late, the CRA have heard alllllllll the stories and are unable to bend. They work from their scripts and that’s that.
- Discovering T4 errors
Your previous year’s T4s had to be redone as there were errors in the original ones issued. And, often these are identified by your own employees (imagine the trust this breaks between you and your team).
- Compliance scares you
If there’s one thing the CRA likes, it’s a business who is compliant. If you’re feeling concerned about compliance issues, but you don’t know where to get the answer (or a straight answer that’s in your language, not CRA speak), a payroll service provider offers insight and clarity.
- Employees have payroll questions
But you simply don’t have the answers or a resource for answers.
Immediate benefits of a payroll service provider
While we can’t guarantee that working with a payroll service provider will solve all your business issues, our clients have found the following benefits once they started outsourcing payroll:
- There’s more time to focus on the business without having to worry about payroll,
- Payroll becomes a simplified, streamlined and documented process,
- Gain in financial savings, often because you are no longer incurring late penalties or submitting inaccurate forms,
- Reduced risk for errors due to a well-defined schedule, meaning compliance is more likely, and
- You have a resource for any payroll questions, both personally and for your employees!
Preparing for payroll outsourcing
If you know your payroll process needs improvement, there are a few things to organize prior to interviewing payroll service providers. We recommend gathering the following information prior to your initial interview:
- Number of employees,
- Type of payroll cycle (e.g. monthly, bi-weekly, semi-monthly),
- Dollar value of your payroll, and
- How much time and money it’s costing you to process your own payroll, both in terms of costs and actual pain (hello headaches) for a realistic evaluation.
It’s always best to interview at least two-three potential service providers to ensure that you find the right fit for your company and needs. If you’re not sure where to find a payroll provider, reach out to your network, including your bookkeeper or accountant.
While we are big advocates for payroll outsourcing (where it makes sense), what’s important to remember is that, ultimately, you are still responsible for your business. What outsourcing your payroll should be about is raising efficiencies in your business, both in terms of time, money, and accuracy, so you can focus on the rest of your business.
While a quick Google search for “payroll service providers” will identify a number of companies who can support you, if you still have a few questions and are interested in objective guidance, call us for a simple conversation!