Benefits of Outsourced Payroll Accounting
Small-business owners need to oversee many different aspects of their business: They have to be a marketer and a salesperson and still carve out the time to manage their finances, which often means that the payroll accounting process falls to them, too. Whether you’re managing several offices or a single storefront, you can benefit from using our online payroll accounting services to handle your administrative tasks. This is one aspect of your business that it makes sense to outsource.
What Are Payroll Services? How to Define Payroll Accounting
Payroll accounting is the recording and management of employees’ compensation and taxation. This information includes salaries, gross wages, bonuses, commissions, fringe benefits, holiday pay, and other types of paid time off. Payroll accounting also includes withholdings for health insurance premiums, wage garnishment, Social Security taxes, contributions to savings plans, Medicare taxes, and state and federal taxes.
What’s Included in Payroll Accounting: Examples of Tasks
Payroll accounting typically includes:
- Regular payroll processing and issuing of paychecks
- Recording of pay and benefits into the company’s accounting ledger
- Ensuring accurate withholding of payroll taxes
- Making payments to tax authorities
- Managing withholdings for employee benefit contributions
- Keeping the business in compliance with payroll reporting regulations
As you can imagine, the payroll accounting process is a time-consuming one, even if you have a small workforce. One of the benefits of having an accountant for your business is that they can handle these duties quickly and accurately, but having an on-staff accountant isn’t always practical. Outsourcing to an online payroll accounting service like Ignite Spot is a great way to save money and leave these tasks in good hands.
Advantages of Payroll Accounting Services
Lower Costs: You’ll pay much less when you outsource your payroll accounting rather than hiring a full-time accountant for your business.
- Time Savings: Free up your time to focus on the big picture of growing your business instead of the day-to-day number-crunching of payroll management.
- Peace of Mind: Trust your payroll services to experienced professionals and you shouldn’t have to worry about the IRS knocking on your door.
Lower Payroll Accounting Costs
Many businesses hire a payroll accountant to keep track of IRS filings and employer taxes, but when you’re just starting out, you may not be able to afford it. The full-time salary of an accountant depends upon where you live, but did you know that their average wage, according to Payscale as of 2019, is $50,757? After you pay your employer taxes, you’re going to be closer to $56,000 a year, and that’s only likely to go up. Is that a cost you want to accrue just to keep your books and payroll straight? Probably not. Online accounting and payroll services are an affordable solution. That’s why so many companies now use online payroll accounting and payroll services at a fraction of the cost.
Time-Saving Accounting and Payroll Services
Outsourced accounting and payroll services can free up time and allow you to focus on growing your business and keeping your customers and workers happy. It’s important to treat your employees well, since they’re among the most valuable assets your business has, but it’s also crucial to keep good records of their hours and benefits, which can take up a lot of time you could be investing in your workers. Our payroll accounting service can help you reduce the amount of time you spend on your bookkeeping needs by up to 80%. With Ignite Spot’s accounting and payroll services, you can focus on working with your team to grow your business, rather than being shut away in your office crunching numbers.
Payroll Accounting and the IRS
A small-business owner needs to understand a number of things to ensure compliance with IRS guidelines while owning and operating a business. You’ll need to choose and stick with a good record-keeping system, and you’ll need to keep up on the requirements for managing things like tax withholdings and payments and retirement benefits. Having professional accounting and payroll services to support your business can help you navigate ever-changing tax laws. And don’t forget about the deadlines: Payroll accounting is fraught with them. It seems like there’s always some sort of filing that needs to be submitted, whether it’s a 941, a W-3, or 1094-C. It never ends, but when you work with us, we can keep up with it all for you.
At Ignite Spot, we focus on small businesses, and our accountants can help you with all of your accounting needs. In addition to payroll accounting services, we offer a wide variety of other capabilities to help you run your business, including tax preparation and planning as well as CFO services. We’re intensely focused on profitability, and we’re here to help you grow your business. Contact us today to see how our financial services can benefit you.
Frequently Asked Questions
Does Payroll Fall Under HR or Accounting?
Payroll can be delegated to the human resources department or the accounting department. Many small businesses don&rsqursquo;t have a human resources department, so payroll duties are delegated to the accounts payable manager. One of the advantages of payroll accounting with an outsourced service like Ignite Spot is that you don’t have to worry about which of your employees can cover this task. We’ll take care of it for you!
What Is the Journal Entry for Payroll?
In a business ledger, payroll journal entries are recorded as initial recordings, accrued wages, or manual payments. Most journal entries will take the form of initial recordings, which document employees’ gross wages and withholdings as well as employment taxes. Accrued wages may be entered when an amount is owed to a worker at the end of an accounting period and has not yet been paid. Manual payments are entered when you need to cut a check due to an adjustment in pay or a termination.
Is Payroll a Liability or Expense?
Payroll can be an expense or a liability. Payroll expenses, recorded on a company’s income statement, show the amount of employee wages a business must pay; payroll liability, recorded on the company balance sheet, is the amount owed to employees that has not yet been paid out.
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Written by Eddy Hood