Payroll Processing

Written by Seth Cotterell
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Payroll is one of the primary functions of human resources departments and individual employees in smaller companies. It is also one of the most time consuming and expensive functions that departments and individuals perform. Manually entering employee time worked, sick days taken, vacation accrued, and other necessary information takes too much time and costs too much money for most companies. It is also prone to mistakes that are expensive to correct.

One way to get around the payroll pitfall is by automating or outsourcing the payroll function. There are many businesses that specialize in payroll processing. They do nothing but receive, interpret, analyze, verify, and prepare payroll for their clients. Because they perform only payroll functions, their expertise is incomparable and they are far more accurate and commit fewer errors than employees who must deal with other tasks simultaneously.

Payroll Processing

Here is how it usually works. When you contract with a payroll service company, you send them all your payroll information. Once they have that information, the payroll processing company handles the rest. They are usually full service companies that do everything from filing your payroll, federal, state, and local taxes in a timely fashion to processing and distributing 1099s and W-2s. Much of this can be done online or over the phone if you prefer.

Letting a professional handle payroll processing is a great way to free your valuable employees from time consuming tasks. They can then focus their attention and energy on other tasks that will increase revenue or reduce expenses. For smaller companies without human resources expertise, some of the top payroll processing companies will act as full HR departments. Some will provide you with software that makes payroll processing almost completely automated, depending on the specific requirements of your business.


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