Payroll Choices

Having a chat this week with someone who wanted to move their payroll to QuickBooks reminded me of the challenge business owners face when selecting how to process their payroll. Regardless of what processing option you select, it’s important to remember that someone who works for you (either as an employee or in a consultative capacity) must understand the payroll in depth.  That means being clear on the tax demands of federal, state and local governments.  It also means understanding how to deal with issues like garnishment for child support payments and other delinquencies.  In sum, you need someone who can get at the right information when it's needed.

The word “organized” can’t be used enough in a sentence that also includes the word “payroll”.  You have to know the correct information about every employee and you have to get it right every time.  QuickBooks has tools to help you get started and walk you through the process.  The idea is to make sure you’ve got the information you need before you sit down at the computer.

Just a look at that preliminary list is enough to send many people straight to a payroll service provider. For many companies that is the best option, but it’s worth noting that outsourcing payroll is not like selecting a vendor for garbage pick-up.  Some weeks payroll will run as easily as getting the trash to the dumpster.  Other days there will be issues, and they have to be dealt with real time.  Payroll is the most important thing you do for your employees, and it has to be done right every time.  On top of that, the penalties for not complying with payroll taxes are swift, severe and actively enforced.   Like every other challenge in business, it can be managed, but it’s important not to underestimate what it will take to “make payroll”.  It’s not just having the money in the bank.