Of all the bookkeeping tasks in an office, tax management is widely considered one of the most difficult. The complexity of local, state, and federal laws, the preferences of individuals, and the other demands on the bookkeeping staff’s time make payroll tax issues very difficult to manage.
Fortunately, automation can come to the rescue. Just as we can handle timesheets, accounts receivable, inventory, and accounts payable with specialized software, we can also use the power of the computer to manage payroll taxes. The investment is one that will no doubt pay many dividends for your business, and the great thing is that the time horizon for it is very long.
If staff, management, or others in the mix have reservations about making this upgrade, there are several key areas they should consider before closing the door.
Protection From Mistakes
Because of the complexity we mentioned earlier, payroll tax calculations are notorious for errors. Most are benign and accidental, and normally the errors can be corrected. But because of the prevalence of fraud, many such errors are viewed first as deception and only considered honest mistakes after a full review.
If your overall bookkeeping house is in order, you’ll come through audits or other investigations without any problem. But the headache and expense of seeing things through to this conclusion can be a serious disruption to your operations. The process of getting things cleared up will require a lot of your time, considerable effort by your employees, and some significant disruption to your daily routines. That’s the price you pay even when you’ve done nothing wrong.
It’s far better to avoid mistakes than to survive them, and when a software system can make that happen, it will quickly pay for itself.
Efficiency In Your Office
Cobbling together your own system of spreadsheets, paper records, and other methods can look good in terms of the cash cost incurred at the time of purchase, but over the long haul you’ll see that payroll software will pay for itself by making better use of employee time and skill.
Keeping your personnel moving and on task is vital to making the most of their time. When they need to go back to check and re-check their calculations, valuable time is lost. In some situations, it can’t be helped, but in many, the use of payroll tax software would have decreased uncertainty, captured errors, and made staff more confident in their entries.
Staying Current
The only constant is change, and the only thing certain is death and taxes. Those two sayings make it clear what one main way is that we can benefit from using payroll software.
Whether it’s an incumbent promising to right past wrongs or a challenger who wins an election with vows to reform the system, the tax codes at every level of government are in line for massive changes with every election. It can seem as if your personnel is just getting the hang of your current system when a new group of rates, rules, and exceptions hits the pipeline.
Software that can update into compliance with changing laws not only reduces errors, it also reduces the time your staff spends making updates. That combination saves you time and money.
The best solution to any business task is to strike the best possible balance of cost, simplicity, and effectiveness. While many businesses may do well with payroll taxes over the short term, in time there will be at least one thing that complicates the system and calls for a change. Investing in payroll tax software will help to avoid those problems as well as others down the road.
