Why Your DIY Payroll is Killing You

DIY payrollA small business can calculate and run its own payroll. It doesn’t take much more than a readily available brand name spreadsheet calculator. And, if you can master the spreadsheet templates, you can build linked reports and graphics. All you need is time, patience, and the know-how. The Small Business Administration offers 10 steps to set up a payroll system.

Between you and your accountant, any small business owner should be able to do it. But, sooner or later, you will discover why your do-it-yourself payroll is killing you and your business.

Smallest options

Without endorsing any of these alternatives, each of them offers some advantages and disadvantages for brand new businesses.

  • Microsoft’s Office Excel, Google Docs, and other office suites let you spreadsheet budgets, accounting, and payroll. If spreadsheets are your craft, you can generate complex payrolls and reports.

  • Free online payroll calculators include those at Paycheck City® and eSmart Paycheck. They will do for calculating a very few checks, but they do not archive, compile, or report – unless you upgrade or succumb to the heavy advertising.

  • Alternatives to the well-established accounting software by QuickBooks include the less complex Freshbooks and the less expensive Sage 50. Each of the online and on-site packages has advantages for specific business sectors and for specific workforce counts.

When starting a business, it might seem no more trouble than writing a check to yourself, but nothing is ever that simple. The pay is subject to taxes, withholding, benefits, and even retirement deductions. Monies deducted have to be reported and transmitted to the proper agencies, and you have to retain records for legal requirements and good business practices. So, unless you are an accountant, these are not likely your strengths.

Sensible Options

If you are among the majority of small business proprietors, you own and operate restaurants, hair salons, landscaping services, childcare facilities, general construction, and/or retail sales, your payroll needs are time consuming, high risk, and fluid. Assigning your payroll to sophisticated technology saves you time, liability, and organization.

  • Time is largely a function of size. Obviously, processing payroll for 10 plus employees is functionally more time-intensive than it is for just a couple of people. Data entry is not the real burden. But, entry, cross filing, verifying, and proofing still entails storage and reporting. DIY still requires you to run current data against budget, and report and pay withholding.

  • Risk is all yours. The first liability lies in entering incorrect data or mis-entering correct data. Since payroll is a distraction to the entrepreneur’s passion and focus, errors arise despite the best intent and attention. A second problem occurs when data is not reported accurately and timely in compliance with state, local, and federal agencies. And, a third concern arises from your requirements to file and archive records.

  • Fluid processes mark best practices. A fluid process will run itself and add value. An automated payroll will perpetuate its own quality and adapt with scalability to your growing and changing needs – integrating data, managing budgets, and reporting in real-time.

Now, when you decide to move your payroll to an HRIS/HRM system depends on a number of things. But, the lead is how much of a challenge payroll has become for your ownership. If payroll is not your business, some system can do it better for you. Payroll software and cloud-based systems add value by allowing you to use your time better, assume your process risks, and expedite your future.

Once you figure out why your do-it-yourself payroll is killing you, it is time to shop for what you need to make a difference in your business now and into your future.

To compare and find the best HRIS, PEO, or Accounting Software for your business try any of these recommended resources.