Reducing the Cost of Processing Payroll

In soft economic times, business owners are looking for new ways to trim costs. Of course there are big ticket items, such as a reduction in employees and/or their benefits. Have you thought about cutting some small ticket items that can truly add up throughout the course of the year? Here are some suggestions, for example, on how to slim the burden of producing your payroll.

1. Outsource payroll: organizing each payroll is a time consuming, therefore costly, process. With the regulations and procedures that need to be navigated and the forms and returns to be filled in to get it right, there is an element of danger added due to the possibility of making a mistake. It may be more cost effective to outsource payroll to a service provider who will carry out all processes in accordance with the latest regulations, insert this information into the correct forms and get salaries deposited into your employee’s bank accounts.
2. Use direct deposit for salaries: a good way to save money is to use direct deposit of payroll (DDP) in place of issuing paper payroll checks. There is a significant cost differential between an online transaction and the processes around preparing and issuing checks.
3. Extend the payroll period: switch from a weekly to a biweekly or monthly payroll period to reduce processing costs.

The actual cost of producing the payroll (calculating pay, producing checks or making deposits and keeping track of employee information) is itself an area where savings can be made. Always ask for expert advice if you have questions concerning the processing of your payroll.