Payroll is one of the most vital aspect that requires utmost accuracy and precision with no room for any errors and mistakes as that would mean bigger problems at hand.
Are you running the payroll of your business by yourself? With the help of a high-end accounting system, it is supposed to be easy breezy and a walk in the park. Why couldn’t it be, right?
In every business, perhaps payroll is one of the most vital aspect that requires utmost accuracy and precision with no room for any errors and mistakes as that would mean bigger problems at hand. And risking any of that is not worth every savings you could possible get by doing it on your own and not employing professional outside help to manage it for you. Additional responsibilities is just one of these 5 problems of running payroll by yourself that you will have to deal with when you make an error or will fall short.
Penalties for Failing to Comply with Payroll Requirements
Failure to remit payroll on time and not complying with all the payroll details and documents required corresponds to penalty, interest, fine or other serious and grave consequences. Thus, it is very important to take note of the specific dates of submissions especially if it falls on a holiday or weekends, the employment considerations, and rules governing the payroll system.
Lack of any professional support in doing so leaves you to rely on your own accuracy in knowing and keeping adept of these small details but very critical and vital in running a business as a whole.
By not complying with any of the stated payroll requirements, you may be prosecuted and may be fined from $1,000 to $25,000 or could be fined and imprisoned for a term of up to 12 months. If you, however, disagree, it is possible to make an appeal and waive the penalties and charges if the reason why you were not able to accomplish your payroll obligations is under an extraordinary circumstance.
Additional Work Load and Stress
Running a business entails huge responsibilities and duties as there are several aspects of it such as accounting, marketing and operations that you should be able to manage excellently. While multitasking and juggling everything at once may seem a good and productive thing to do, this, however, means dealing with all the stress and demands of each one at the same time as well.
Doing the payroll by yourself is an additional tasks and responsibilities to handle especially when there are several unsolved issues that need to be addressed when you should be focused on running the operations of the business as a whole. The use of the payroll system and programs may be able to show you when something is wrong but this kind of support may not necessarily be sufficient and may still require monitoring from your part as it will only process and compute the data you input regardless if it is accurate or not.
And if you don’t see and realizes these errors and irregularities straightaway and took you after the end of the entire fiscal year to find it out, then fixing it may take weeks or probably months, or may cost you money and penalties with the government.
Keeping Track of the Surprises on the Timesheet and Dealing with Auditors
Running the payroll could also mean that you will need to constantly allocate certain time to study and learn on all these things, how they work and possible legal ramifications in cases of late and non compliance. And most of these things will need expert knowledge and professional advice. Thus, by entrusting it to the experts in the first place saves you the time and effort from studying, which you could have maximized by doing other things that require your own expertise and decision making.
On top of all, you have to deal with the auditors as they have to check and ensure the accuracy and correct figures on the payroll. They will be checking each items, which includes the following:
- Making sure employees are paid in corresponds to their work done
- That salaries are paid to the right and valid employees and correct rate of pay
- Salaries are correctly calculated
- It is authorized
- Payroll and all transactions are recorded in the books
- That payroll deductions are properly and correctly paid to the right third parties such as tax authorities.
- Auditing comes in several stages, tests and timings that you will need to comply as well.
Messing up the Taxes
One thing that business knows that they shouldn’t get in trouble with is messing up with taxes. It is important to be very accurate and exact all the time as even one mistake may cost you a lot already and corresponds to a huge consequence with the government, not to mention with your employees.
Different tax codes and computations can be very complicated that it needs to be done with proper care and ample of focus because the possibilities of getting it wrong is immense and there should not be any room for errors at all. Hence, there are people who specialize and were trained to do it with ease and accuracy to ensure no discrepancies on the figures and numbers.
Losing Employee’s Confidence in You
Payroll is a very sensitive subject. Small inconsistencies, wrong data and delays can already trigger negative reactions and cause many employees to be mad, annoy and doubt your capacity in an instant. And who could blame them when while they are doing their part correctly, you cannot comply to your end of the bargain?
If they lost their trust and turn againsts you and decide to leave, what that leaves you? Perhaps you can always find new set of people, but starting from scratch with training and getting them acquainted wth the job may require severe consequesces such as additional work for you, delays, cost, not mention dealing with legalities about the condition of how your employees left their job.
What you think of this list of problems you will possibly face when running the business payroll by yourself? Don’t you think it is one aspect that should be left to the hands of the experts to deal with? Sometimes in our intention to be able to save more if we do it ourselves may end up to bigger consequences from even a tiny mistake that will instead cost you more money, time and effort to fix.
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