Outsourcing payroll can save your accounting department both time and aggravation, says Robert Gialamas, president of Paytime Inc.
“Payroll is not easy anymore, especially here in Ohio,” Gialamas says. “When you consider there are over 600 local [tax agencies] in Ohio, all these extra tax agencies add complexity. They all have their own special rules that you must follow, or the penalties can be very steep.”
Wolff Brothers Supply Inc. began using Paytime about four years ago after a previous outsourcer’s proprietary software repeatedly failed.
“We outsource payroll, and we’ve outsourced payroll for quite awhile,” says Irene Hill, secretary and treasurer of the board at the Medina-based distributor. “It’s a benefit because they do the taxes for us. They have somebody in-house to process the payroll.”
For Hill, it’s simply easier and cheaper to allow someone else to handle the task.
“I have people in-house who keep track of the hours, and we transmit the payroll to them on the Internet,” Hill says. “What we get back are the checks, and they’re all direct deposit.”
While the Internet is the most common way to enter data to a payroll company, Gialamas says there are still clients who send data via fax or even call their information in.
When choosing a provider, Gialamas says, employers should evaluate how long a service bureau has been in business and its employee turnover rate. Convenience is the most common reason a company will outsource its payroll function.
“The biggest issues that come are the savings of time, which ends up saving you money just from a processing standpoint,” Gialamas says. “Payroll companies can add value that you wouldn’t otherwise receive.”
But it can be in the area of complicated tax laws that outsourcing really pays off.
“If you get a (payroll) tax penalty and you’re on your own, there’s a good chance you can incur some pretty hefty fees that will affect your bottom line,” Gialamas says. “We get a lot of tax notices. More than 50 percent of our notices are invalid because the tax agencies are processing incorrectly. It’s nothing the client did.
“They’ve got computer systems like everybody else, and it’s not uncommon to receive a notice saying, ‘We did not receive your payment.’ We take care of that. We do the research. We show the agency proof the payment was made. The client doesn’t have to get involved; they don’t have to waste that time.”
A little more than a year ago, Ohio’s computer system mistakenly sent out improper tax notices to about a quarter of Paytime’s clients, a problem the company dealt with for those customers.
“Payroll is just one thing for an HR person you really want to outsource, unless you’ve only got two or three people working for you sometimes I even question that,” Hill says.
“They don’t want to be processing payroll,” he says. “It’s not strategic. It’s more a hassle than anything else. You don’t need to waste the controller’s time or hire a payroll person. All you really need is someone to submit the time information.”
HOW TO REACH: Wolff Bros. Supply Inc., (330) 725-3451 or www.wolffbros.com