question is who benefits the most from using it,…..
In this article, I’m going to analyze the pro’s and con’s of
the DIY approach to payroll. And first,
I’ve got to admit something to you – I’m very biased. Yes, I’m letting you know upfront that I own
a payroll company and I want you as a customer.
Now that I’ve gotten that out of the way, let’s dive in!
First a question. Why
did you get into business? I have no
idea what business you’re even in right now, and I’ll bet that the majority of
readers are NOT in the business of processing payroll. With that said, what business did you get
in? Was it the paperwork business? How about government compliance oversight?
Did you get into finance and banking? I know, you got into the software
business! I know when I got started with
my first business, I did not think about all the “other” issues that would come
along with it. I thought that being in
business was a simple as offering my products and services, people would buy
‘em, and I’d live the life I dreamed about.
Second question: Does doing things yourself make sense? In some cases, it sure does. The majority of the time, I’m not so
sure. I went to school for
accounting. I have a degree in
accounting. I have a license as a
certified public accountant. I don’t
look in the mirror to attempt open-heart surgery. I retain the services of a subject matter expert. I want it done right the first time. While bookkeeping and accounting and even
taxes can often be thought of as things you do yourself, consider the
ramifications of getting it wrong. In carpentry, measure twice, cut once. If you cut too short, you can’t use the piece
you cut. You’ve gotta start over with a
new piece. Making the wrong calculation,
filing the wrong form, remitting the wrong amount, or submitting anything late
can be costly in the form of penalties, interest and/or tax rates. DIY projects are great for sure. When it comes to payroll, taxes, forms and
submissions, I’m not sure this is the right time or place for a DIY Project.
Last question: What are you really saving by doing it
yourself? This is the number one reason
I’ve heard over the past 20+ years from business owners – I save money by doing
it myself. Ok, do you? Have you ever counted the amount of time you
spend on payroll processing for your own business? Do you know what you earn per hour from your
business? According to the National
Small Business Association, the average business owner will spend about 6 hours
per month at an average cost of $500 per month on payroll administration. How do you compare? I’m willing to be the 6 hours a month is
pretty accurate for you. Using that as a
basis, do you pay yourself at least $20/hr for your own time? That’s an annual salary of about
$40,000. It means you spend about
$120/mth of your own time. Now, what
about the cost of whatever software you might be using? Did it come with any technical tax
support? Did it come with any