The juggling act

Running a business is walking a tightrope. Paying salaries on time, meeting business expenses, and generating profits, among others, is a Herculean task. The law requires that you pay your taxes on time and also manage your books properly. It’s like juggling balls while walking a tightrope. Because there is a lot to manage. From payroll to taxation, from bank reconciliation to tax deduction, the list is long. To make matters worse, every mistake is penalized and many companies end up paying heavy fines due to such mistakes.

the saviors

Large companies can manage this with the help of separate account departments, but this is a costly affair. Small businesses operating with small teams and tight expenses cannot do this as efficiently. For such businesses, there are two viable options to choose from. They can opt for payroll management software or they can hire a third party payroll management company.

1. Payroll management software

Payroll management software is a good option for small businesses. Companies that have small teams, stable businesses, and intrastate transactions can easily navigate with them. If you’re ready to invest a specific amount of time with consistency in account management, they’ll work. These programs can present the data in an organized format and simplify your work. But, the chances of error are always there. The person responsible for entering the data into the system is you or your representative. If you make mistakes when entering the data, the software will become helpless and give wrong results. This takes you back to where you started.

Absence of rehabilitation system.

The absence of someone to revalidate tickets is a problem that all small businesses struggle with. If you’re trying to get someone involved, the cost of labor and time would make this feat too expensive. If you don’t, there will always be a chance of error.

Problems with complex data

The other problem with these programs is that they have to be managed carefully. Too many variations in the structure of the entries can create a lot of confusion. If you’ve hired part-time workers alongside your stable workforce or make payments to freelancers or other third parties, adjusting your payments can be a huge nightmare. Calculating the various tax tables when doing interstate business is also cumbersome in these programs.

Good for simple transactions

There is no doubt that if you are running a simple business without too many variables, these programs can prove to be a very profitable solution. But running a diverse business that relies on them may be asking too much.

2. Third party payroll services

The most viable option for complex scenarios is to hire a third-party payroll service. These agencies with their certified staff can handle the job efficiently. Along with payroll management, you can also delegate a number of other important services, such as tax management, accounting, balance sheet preparation, bank reconciliation, tax deduction and deposit.

Revalidation of data at various levels

Due to the presence of a structured team of professionals, the data is verified at many levels and therefore the chances of error are negligible.

Economic

These agencies are very profitable in their service. The same work cannot be executed by an internal team with the same expenses. In small businesses, staff will be idle most of the time. In medium-sized companies, you will be overloaded with work. When calculated on the basis of return on investment, these services are very profitable.

the human touch

The other advantage is human help. In case you get stuck on some technical clause or want expert advice, these agencies can provide reliable help.

No binding obligation

The biggest advantage is that these companies operate from their office and therefore there are no infrastructure costs or overheads. You only pay for the required services without any undue obligation.

So if you have a small business and find it difficult to navigate the confusing path of taxes, payroll and other accounting technicalities, then you can choose the service that is right for you. This will help you focus on your core strength of business development and energy won’t be wasted managing numbers on the books.