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The Top Six Reasons Why Small Businesses Should Outsource Their Payroll

A lot of business owners aren’t experts in accounting or have training or experience in running their own payroll. Payroll processing can be challenging and confusing to small business owners, and the fact that the IRS can impose penalties if not filed correctly makes payroll processing somewhat intimidating. Because of this, most small business owners leave payroll processing to experts -either by outsourcing payroll, or processing it in-house (also known as traditional payroll).

1. Outsourcing Your Payroll is More Cost Effective

If a business owner uses a certified public accountant (CPA) to perform in-house payroll processing, costs could be anywhere between $260 and $480 per payroll run -not per month, but each time payroll is run.

For in-house payroll processing, using a CPA is the best way for having your payroll done correctly because certified public accountants are specially trained in accounting and payroll procedures. However, certified public accountants charge between $65 and $120 per hour and at approximately 4 hours per payroll processing run, the cost can be quite substantial. And if your business runs payroll bi-weekly or weekly, you’ll double or even quadruple this amount. Even without a business degree, everyone knows that the lower your expenses are, the quicker you can become a profitable owner.

Outsourcing your payroll can give you all the benefits and accuracy of having a CPA do your payroll, but will run you at a fraction of the cost. It’s the best of both worlds; easy, accurate, and cost effective. Outsourced payroll can save you thousands of dollars per year.

So how much can you really save? Let’s compare how much it would cost for Small Business Inc. to run payroll for its four employees once a month. Just to be conservative, we’ll use $65 per hour to estimate the traditional in-house payroll cost –the low end per hour cost for a CPA.

Outsourced Payroll

Base price of $44.95 per payroll run + $1.85 per employee = $52.35

[$44.95 + ($1.85 x 4)]

Traditional In-house Payroll

Four hours at $65 per hour = $260

Outsourcing payroll saves Small Business Inc. $207.65 per month.

2. Outsourced Payroll Helps Small Business Owners Avoid IRS Penalties

So what happens if you can’t afford a CPA and you decide to try your hand at calculating, paying, and filings your own small business payroll? Because of the complexity and ever changing payroll laws, it’s easy to make mistakes.

Each year, approximately 40% of small business owners are penalized by the IRS for paying or filing their payroll taxes incorrectly. That’s a pretty high percentage, and at approximately $850 a year in penalties, doing your own small business payroll processing might not be as cost effective as if you had a specialist do it for you. Payroll outsourcing companies such as Online Business Payroll automatically calculates, pays, and files your small business payroll taxes for you. Because of the automated process, you’ll never be late or miss a payment or filing.

3. Outsourced Payroll is Easy

Payroll processing done through an outsourced small business payroll service is easy to use. Although setting up your employees could take a few minutes, the actual payroll run can be done in just a few minutes.

Just log into your outsourced payroll service’s secure online portal and enter in the hours each employee worked during the pay period. After you enter in your employees’ hours, review the information, and click submit. Your payroll is done.

4. Outsourced Payroll Takes Care of W-2 and 1099 Forms for You

At the end of the year, small business owners must give their employees either a W-2 form or a 1099 form by January 31st of the following year. W-2s are forms that let employees know how much money they earned as well as how much federal, state, and local taxes were withheld during the year. Form 1099 is for independent contractors who you paid more than $600 to during the year.

Not only do you need to give these forms to your employees and independent contractors, but you also have to file certain forms with the IRS. Again, if you don’t know what you’re doing, this could cost you in IRS penalties.

Outsourced payroll companies keep track of this information and file it for you. At paperless companies such as Online Business Payroll, small business owners can print W-2s and 1099 forms for their employees right on the spot. Small business owners are able to get tax forms to their employees faster by being able to print these documents for them, rather than employees waiting for their tax forms to arrive in the mail.

5. Outsourcing Payroll Services Let You Maintain Control

Most outsource payroll services, allow you to maintain control over your payroll while taking care of the tough payroll tax calculations in the background. Outsourcing your payroll is a beneficial relationship because it allows you to stay in compliance with tax laws, but also allows you to focus on your business instead of trying to become an expert in payroll processing.

Entering your payroll information online allows for you to maintain control of your payroll processing and helps eliminate double entries or typing mistakes often associated with calling or faxing in your payroll information to a customer representative. You enter it, you review it, you approve it –you’re always in control of your small business payroll processing.

6. First Month Free

The best thing about using an outsourced payroll service is a lot of companies allow you to try their service for free. You have nothing to lose, why not give outsourcing a try.

 

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Top Facts on Small Business Consulting

Hard work and innovative ideas are the only way to achieve business success. The most prominent business people around the world have proved this with their success stories. Every businessman will have a story to tell regarding his hard work and how he managed to achieve all success, he has achieved throughout his journey. Anyways, being successful is a trend which might not go well every time. Running a business is not that tough if you are doing it right. Nowadays, there are business consulting services which will give you awesome support, regarding specific fields to ensure effectiveness of your sales and marketing. There are plenty of small business consulting services out there.

You need to have some general information regarding these small business consulting services to ensure brilliant outputs. Not every small business consultant services out there will give you those positive results that you are expecting. Research and comprehensive learning process are the success for any efficient strategy. The main advantage in hiring small business coaching services is that they will have deep knowledge in different aspects that will be determining the efficiency of your business strategies. has witnessed many evolution in the business field. However, this sector has gone through many changes when compared to the initial small business consultant service facilities.

The evolution of small business coaching services made things much easier and quicker for businesses. Nowadays, you don’t need to wait for long days in order to experience a positive change in your business climate. The strategies utilized by the business consultant services are really quick and efficient. Things get better as soon as they start their process. The main process here refers to the recommendations and tricks they suggest regarding the particular section of the business. There are many different types of business coaching services. The selection of these services must be greatly depended on the type of business you have set up.

It is a good idea to make use of these business consultant services, in order to gain some exceptional advancement in a limited period of time. Actually these excellence will be automatically gained by all entrepreneurs eventually, but it takes time. As these types of small business consulting services are available out there, you can make things done pretty fast. There should not be any confusion regarding any of the aspects. You should make a comprehensive learning process regarding these services to ensure a smooth procedure.

First thing to check is the sector in which the particular consulting service is focusing. It is obvious that all of these services will have certain sector in which they are specialized. Knowing this fact will have lots of influence in getting the expected results. Some of them will be experts in sales consulting whereas some other might have excellence in marketing and management. Determine these factors regarding these small business consulting services and enjoy superb results. These consulting services do not just give you great profits but also a good reputation and business image. If you are using these services in the right way things will get more impressive for sure.

 

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Essential Skills for Entrepreneurs and Small Business Owners

Research studies into the failure of small businesses in Australia, have identified that in over 90% of small business failures, a lack of appropriate management skills have been cited as the key cause of that failure. One way to offset a lack of management skills is to outsource them to experts. For most small businesses this is beyond the reach of their limited budgets. A more viable option is to develop the skills you need to manage your business operation. Let’s examine the key competencies you will need.

Strategy Development

You need to develop skills in undertaking appropriate business research, including how to identify and locate relevant business information, analyse the data in order to determine an appropriate strategy. You then need to develop skills to effectively communicate that strategy in both a formal way, such as a business planning document, or to informally articulate it to your staff or other stakeholders when required.

Sales and Marketing Management

Strong sales and marketing skills are vital in the promotion of your small business and its products and services. You need to be able to undertake market research which will help you to identify where your markets are, the total market size and the size of each of its key segments. You should also be able to profile your customers, identify their needs, wants, behaviours and ambitions and parlay the information into powerful and effective marketing campaigns and sales techniques which will help to drive sales revenue.

You need to be able to keep your finger on the pulse of your customers ever-changing demands and the business environment in which you operate and to identify the threats and opportunities that may impact on your small business. Inability to adjust to changes in the market place was identified by market research as one of the key skills lacking in small business operators.

Financial Management

Many entrepreneurs abdicate responsibility for the financial management of their business to their accountants.This is a rookie mistake. As the business owner you must take responsibility for the management of your finances.

The first core requirement is the ability to maintain an accounting system that is compliant with current taxation requirements, such as MYOB or Quickbooks. These systems provide a raft of automated processes including the delivery of key financial documents such as Balance Sheets, Income and Expense Statements and Cash Flow forecasts.

You need to develop the core skills that keep your business liquid as more businesses fail due to a lack of cash rather than a lack of profit. You also need to ensure that your business has sufficient capital to continue operating. Financial planning and management skills are also vital to your businesses survival and you need to develop working relationships with your accountant and your taxation specialists

Legal

It is essential that you develop an awareness of your legal rights and obligations. You need a thorough understanding of the Acts, Regulations, Codes of Practice and licensing requirements with which your business needs to comply. Taxation is just one of the complex legal elements you will need to come to grips with.

Which ownership structure you choose for your business will also carry with it further legal rights and responsibilities. Being able to fully understand and manage the impacts on your business is important.

Operational Management

You need to build operational management skills in order to develop the systems and processes by which you deliver your products and services. The more efficient and effective they are the more ‘productive’ your business will be. Core operational skills include planning, management, communication as well as effective systems design.

Resource Management

Your staff can be your most valuable business asset – or your most expensive, depending on your ability to hire right. Developing appropriate policies and procedures as well as the development of induction, coaching and mentoring programmes can assist in the development of a productive workforce.

Self-Management SKills

Your personal organisation skills may be the key to the success or failure of your small business. You need to be organised, productive, able to communicate and manage your time. You need to be able to negotiate effectively, motivate staff and be able to handle sustained levels of stress.

Technology Management

Technology is the great enabler. It can increase your capacity to deliver with less staff. It can also be a key competitive differentiator. You need to understand and manage technology and be able to identify and take advantage of the multitude of opportunities is offers to small business.

It is important to remember that each of the required skills are not discrete skill sets. To be truly effective as a small business manager, you need be able to integrate each of the core management skills.

You should set yourself the task of developing your abilities in these key management areas on a continuous basis as the skills and knowledge required is forever evolving. Master these core management skills and the chances of your small business being a huge success will improve dramatically.