You probably don't think much about payroll processing in your day-to-day work. However, behind the scenes, properly managing payroll is a crucial task that keeps companies operating smoothly. When payroll isn't handled correctly, it can lead to some major headaches down the road for both employers and employees. Here's information about why payroll processing is so important for companies.

The Compliance Burden

As an employer, you have a legal responsibility to compensate your employees accurately and on time. There are many state and federal regulations surrounding payroll, including minimum wage, overtime, and employment taxes. Staying compliant with all of these rules is extremely important.

If you misclassify an employee or incorrectly calculate their wages, you could face lawsuits or audits. Not only do you need to worry about legal compliance but keeping good records is also vital. Should there ever be a dispute with an employee over pay, you'll need documentation to back up your case. Sloppy payroll procedures that lack accountability will cause issues in these situations.

The Logistical Headache

Doing payroll in-house can be an administrative nightmare, even for smaller companies. Tasks like calculating different pay rates for hourly and salaried employees, adding and deducting taxes, producing pay stubs, and distributing payments add up to a major time commitment.

As you grow, more employee types like contractors and remote workers make the payroll process even more convoluted. That's without even considering managing time card approvals, PTO policies, garnishments, and other complexities that arise. As a business owner, your time is precious. Getting buried doing manual payroll tasks takes away from higher-level responsibilities.

The Simplicity of Outsourcing

How do successful companies handle payroll while avoiding compliance issues and logistical headaches? More and more businesses are turning to automated cloud-based payroll services. Outsourcing to an online provider allows you to save time while also staying compliant.

With a payroll service, employee hours are smoothly tracked, pay is calculated accurately every time, and payments are delivered promptly. Deductions and taxes are managed seamlessly, and you can become an employer that uses direct deposit instead of checks, as according to Fit Small Business, in the U.S., 93% of workers are paid via direct deposit. Additionally, cloud-based services provide anytime access to payroll data and analytic reporting on trends.

By implementing a streamlined payroll solution, you can focus on higher-value aspects of operating your business while ensuring employees are paid properly. Payroll might not be the most glamorous business process, but finding the right processing approach is hugely impactful. Call TAC Payroll Solutions LLC today to learn more about how we can help you with payroll processing.