The IRS says 40% of employers make this mistake. Is your company next?
Posted on April 25th, 2017 Read time: 4 minutes
Every year, the IRS rakes in billions of dollars in penalties from U.S. small businesses – for mistakes they have no idea they’re making. The treacherous trap for many business owners? Payrolling.
It’s why more and more companies are turning to payrolling services. These companies serve as the “Employer of Record” for your contingent work force: temporary staff, project workers, seasonal help, interns, or independent contractors. They take over the complex, time-consuming and ever-changing world of payroll, including taxes, benefits, and HR management. Even better? Since they’re the Employer of Record, all tax filings use their tax identification number – not yours. Taking you off the hook for any potential, costly errors. Here are some more compelling reasons why using a payrolling service could benefit your business:
Expanding your business to another state – without a lag time in revenue.
A typical expansion can take six months or more: finding a location, managing renovations, applying for business licenses, and recruiting employees. So what’s happening to your bottom line while you’re waiting for all that to happen? Nothing. Rather than lose valuable time, hire a payrolling company up front to expand into your target state. Then, hire a sales staff to start generating leads while the renovations and permits are still in process – and use the payrolling company to payroll and manage their benefits. That way, you’ve got a sizeable pipeline of new business ready to go from the moment you open your doors. When you’re ready, you can then move the sales staff (and any other employees you’ve hired) to your own company’s payroll. Another plus? There are typically no conversion fees with payrolling firms.
You’re a foreign company who wants to start a business in the U.S.
Get ready to roll up your sleeves and pump up your patience. Because let’s face it, employment and payroll laws in the United States are very complex – and even more challenging in states such as California and New York. So it just makes sense to use a payrolling service. You won’t need to learn how payroll is processed, how taxes are paid, and what benefits are mandatory or voluntary. Instead, you can spend this critical time building your business. Then, when your company is up to speed and you’re ready, you can transfer the employees onto your own payroll. Even better? This arrangement can be in place for a few months to a few years –ample time to get your business up and running in the U.S.
You’re a recruiter who’s ready to start your own recruiting business.
You’ve got the contacts, the know-how and a great plan to run your own shop. The biggest challenge? Setting up the infrastructure. Check out this list of headache-producing requirements:
- sufficient funds to pay your employees
- a system to pay them, which includes: tracking all their deductions, a process to pay federal, state and local taxes, SUTA & FUTA
- a workers compensation program and policy
- insurance for general liability, employment liability, travel, and any other insurance specific for your business
- a system to bill and collect from your clients
- an accounting system to see if your business is profitable
Hiring a payrolling service as your Employer of Record takes all of that off your plate. Even more, it provides benefits administration for your workers and accounting for your company. Which frees up valuable time so you can actually focus on growing your business – and avoiding the simple mistakes that can result in costly penalties from the IRS.
You’ve got to on-board seasonal employees right now– but you don’t have the capacity.
Maybe it’s your busy season, or you just got swamped with new orders. Which means you’ve got to ramp up staff in a hurry or risk losing revenue. But rather than overwhelming your HR department and getting tangled in paperwork delays, turn to a payrolling company for your seasonal workers. They’re experts at on-boarding quickly, thoroughly and efficiently, getting your contingent staff up and running – and making you money.
Keeping the Tax Man away.
Payroll mistakes are a cash cow for the IRS. As we mentioned, about 40% of U.S. businesses get hit with an average penalty of $845 – and often, much more. But by using a payrolling service like IES, you can rest easy. Because not only do we free you from the never-ending piles of paperwork, we greatly reduce your risk. Most national payroll services offer a tax guarantee, which means you don’t get penalized if there is a filing mistake. And you don’t have to worry about updating your software and keeping up with complex, ever-changing payroll laws. Bottom line? A payroll service can give you protection, profits and peace of mind.
If you’re ready to rev up revenue, reduce risk, and free yourself from the never-ending pile of paperwork, IES is ready to help. Our team of friendly experts serves over 300 companies of all sizes in the U.S. and Canada, and is ranked among the nation’s best in customer service. Contact us today for an affordable, customized solution for your company’s payrolling needs.
Related Articles
Posted on April 25th, 2017 Read time: 4 minutes
Every year, the IRS rakes in billions of dollars in penalties from U.S. small businesses – for mistakes they have no idea they’re making. The treacherous trap for many business owners? Payrolling.
It’s why more and more companies are turning to payrolling services. These companies serve as the “Employer of Record” for your contingent work force: temporary staff, project workers, seasonal help, interns, or independent contractors. They take over the complex, time-consuming and ever-changing world of payroll, including taxes, benefits, and HR management. Even better? Since they’re the Employer of Record, all tax filings use their tax identification number – not yours. Taking you off the hook for any potential, costly errors. Here are some more compelling reasons why using a payrolling service could benefit your business:
Expanding your business to another state – without a lag time in revenue.
A typical expansion can take six months or more: finding a location, managing renovations, applying for business licenses, and recruiting employees. So what’s happening to your bottom line while you’re waiting for all that to happen? Nothing. Rather than lose valuable time, hire a payrolling company up front to expand into your target state. Then, hire a sales staff to start generating leads while the renovations and permits are still in process – and use the payrolling company to payroll and manage their benefits. That way, you’ve got a sizeable pipeline of new business ready to go from the moment you open your doors. When you’re ready, you can then move the sales staff (and any other employees you’ve hired) to your own company’s payroll. Another plus? There are typically no conversion fees with payrolling firms.
You’re a foreign company who wants to start a business in the U.S.
Get ready to roll up your sleeves and pump up your patience. Because let’s face it, employment and payroll laws in the United States are very complex – and even more challenging in states such as California and New York. So it just makes sense to use a payrolling service. You won’t need to learn how payroll is processed, how taxes are paid, and what benefits are mandatory or voluntary. Instead, you can spend this critical time building your business. Then, when your company is up to speed and you’re ready, you can transfer the employees onto your own payroll. Even better? This arrangement can be in place for a few months to a few years –ample time to get your business up and running in the U.S.
You’re a recruiter who’s ready to start your own recruiting business.
You’ve got the contacts, the know-how and a great plan to run your own shop. The biggest challenge? Setting up the infrastructure. Check out this list of headache-producing requirements:
- sufficient funds to pay your employees
- a system to pay them, which includes: tracking all their deductions, a process to pay federal, state and local taxes, SUTA & FUTA
- a workers compensation program and policy
- insurance for general liability, employment liability, travel, and any other insurance specific for your business
- a system to bill and collect from your clients
- an accounting system to see if your business is profitable
Hiring a payrolling service as your Employer of Record takes all of that off your plate. Even more, it provides benefits administration for your workers and accounting for your company. Which frees up valuable time so you can actually focus on growing your business – and avoiding the simple mistakes that can result in costly penalties from the IRS.
You’ve got to on-board seasonal employees right now– but you don’t have the capacity.
Maybe it’s your busy season, or you just got swamped with new orders. Which means you’ve got to ramp up staff in a hurry or risk losing revenue. But rather than overwhelming your HR department and getting tangled in paperwork delays, turn to a payrolling company for your seasonal workers. They’re experts at on-boarding quickly, thoroughly and efficiently, getting your contingent staff up and running – and making you money.
Keeping the Tax Man away.
Payroll mistakes are a cash cow for the IRS. As we mentioned, about 40% of U.S. businesses get hit with an average penalty of $845 – and often, much more. But by using a payrolling service like IES, you can rest easy. Because not only do we free you from the never-ending piles of paperwork, we greatly reduce your risk. Most national payroll services offer a tax guarantee, which means you don’t get penalized if there is a filing mistake. And you don’t have to worry about updating your software and keeping up with complex, ever-changing payroll laws. Bottom line? A payroll service can give you protection, profits and peace of mind.
If you’re ready to rev up revenue, reduce risk, and free yourself from the never-ending pile of paperwork, IES is ready to help. Our team of friendly experts serves over 300 companies of all sizes in the U.S. and Canada, and is ranked among the nation’s best in customer service. Contact us today for an affordable, customized solution for your company’s payrolling needs.
