Payroll is certainly not the easiest or most simple part of running a small business to keep entirely in-house. However, there certainly are rewards and advantages to choosing this plan of action that can make it a strong and viable option in the right circumstances. Most chiefly among these is the sense of control and autonomy that doing so gives you over the operations of your company.
Having this important function of your company in-house also allows for more seamless communication and sharing of information between yourself and the person conducting your payroll. If you have a question or concern, the chain of communication required to receive an answer is considerably shorter when you don’t have to go outside your own company at all.
However, these advantages are not without their dangers and downsides. When considering the decision to keep payroll in-house, you need to consider what this process would look like in your company.
Are you planning on conducting payroll yourself? If so, you need to consider the cost this will have on the other roles you play in your company—especially in terms of your time spent on conducting these roles. You must also consider your level of experience and knowledge with the ins and outs of conducting payroll. After all, the last thing you want to do is make a costly mistake, either due to literal financial errors or issues stemming from missteps in governmental regulations and compliance.
Even if you are not planning on actually doing payroll yourself, but instead having someone on your team be responsible for it, there are things you need to consider. Will this person’s responsibilities be entirely payroll-focused, or are there other roles they will fill in your company? Is there someone currently on your team that will take this responsibility on, or will you make a new hire? What qualifications are important and/or essential for the employee in this role?
These are all vital things you should consider if you are thinking of keeping payroll in-house. In the right situation, doing this can be a great option for those with the correct experience and ability to pull it off.
However, while it can be less expensive to handle payroll internally rather than spend money on an outside solution, these savings can quickly disappear due to mistakes and compliance issues if you are not careful. Not to mention the amount of time and work that will be necessary for you to spend in order to do it yourself.