Outsourcing Payroll: A Trust-Building Strategy for Employers (Sponsored Content)

Patti Callaway: Third parties guide employers through federal tax and labor law changes.

In today’s fast-paced and often unpredictable business environment, companies of all sizes face many challenges, but managing payroll shouldn’t be one of them.

Over the next year, 48% of respondents to Springfield Business Journal’s 2023 Economic Growth Survey said they want to increase the number of employees in their business, while 38% said they plan to recruit new employees. With more employees, however, come increased wages and benefits expenses, a driving cost among business owners.

Patti Callaway, manager at KPM CPAs & Advisors, says business owners who manage payroll in-house may want to look to outsourcing that role not just as an employee cost savings, but also for streamlining and building trust with human resources.

“Many employees are being pulled in multiple directions, handling HR, payroll and various other tasks,” Callaway says. “Amid this chaos, outsourcing payroll has emerged as a strategic solution that not only streamlines operations but also helps build trust between employers and their workforce.”

Nearly half of all small businesses lack an in-house accounting staff, according to a 2018 Small Business Accounting study conducted by Clutch, a business-to-business research firm. However, that doesn’t necessarily mean the businesses are outsourcing either, but having one employee dedicated to accounting, payroll, bookkeeping and HR, says Callaway. She adds that this can lead to an increase in payroll errors, delayed payments and payroll tax filing mistakes.

“There are a lot of things an employer may not think about in regards to payroll,” she says. “When you outsource, the payroll tax payments are paid timely, the quarterly reports are e-filed, the new hire reporting is done and there’s less stress overall.”

What could be a 10-hour task per week, she adds, can be scaled down to one hour for business owners who outsource. In addition, payroll and accounting firms stay up-to-date on complicated tax updates and can help employers walk through these unexpected processes. She gives an example of the W-4, a form employees have filled out multiple times.

“For 25 years, the W-4 has stayed the same,” Callaway says. “It changed a few years ago, and it’s not as straightforward as it used to be. We can help guide employers on these changes.”

Callaway says working with a firm like KPM not only reduces stress but is a way to build trust among employees.

“Nobody has to wake up in the middle of the night worrying if their check will be deposited,” she says.

Many firms use an online portal system for employees to log in, view paystubs and timesheets and request time off, as well as onboard and review handbooks and expectations. In addition, employees know that their paycheck is taken care of.

“It’s our job to stay on top of tax changes, Department of Labor changes, and pass that along to the employer,” she says. “It’s too hard for a business owner to always stay up to date on all of that.”

When deciding on a firm to assist with payroll, Callaway says to look for one that will meet the business needs where they are now and where they want to be in the future.

“We talk to our clients about their best operating procedures for their situation,” she says. “What’s easy today might not be the best fit in five years.”

To do this, Callaway says KPM starts the process with a conversation.

“What are the pains? What are the plusses?” she asks clients. “What do you like, what would you like – and let’s build it from there.”

She says a lot of clients start off hesitant with change, but once they outsource it, there’s an additional peace of mind that the work is being taken care of.

“It becomes a peace of mind that someone has your back,” she says.

This content is brought to you by KPM CPAs & Advisors.