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As a business owner, you are responsible for tracking your employees’ salaries, wages, bonuses, and so on. In addition, you must keep a list of all current and past employees. The proper handling of these financial records is an integral part of managing a business. Therefore, when determining whether to keep payroll in-house or seek help from a third party, make sure you choose the option that is most appropriate for your business.

In-House Payroll
Handling payroll yourself is a practical choice if your business only has one employee. There are several excellent applications that can help you properly complete output reports and compute taxes. Most of the companies that produce these applications provide free trial periods, thus giving you the chance to see if their products are easy to use, able to complete all necessary tasks and compatible with the small business accounting software you currently use. If you need assistance, try talking to an accountant. He or she will be able to answer your questions and perhaps even present you with a few recommendations.

Outsourced Payroll
Hiring a third-party payroll service is a great option if you have neither the time nor the desire to handle payroll yourself. Third-party services typically cater to businesses with multiple employees; however, there are some that target businesses with just one or two employees. If you hire a third-party payroll service, you’re only responsibilities are to send in your employee identification information and report the hours worked by each employee per pay period. The outsourced agency will fulfill all remaining tasks, including making direct deposits and printing paychecks. An additional benefit to outsourcing payroll is that you are no longer responsible for any penalties associated with inaccuracies or late/missed deposits. Rather, the third party payroll service will be held liable for all consequences.

Whichever method you choose to handle your payroll, be sure that it is the right fit for your business. If necessary, consider trying out both. First, take the do-it-yourself route. If you find that it would be more efficient to hire out, then you can begin searching for a third party service.