Entrepreneurs Find Hiring a Payroll Service Brings Perks

It's natural to want to keep costs low but a payroll service is worth the cost.

learn more about Jay DesMarteau

By Jay DesMarteau


Opinions expressed by Entrepreneur contributors are their own.

Small business owners want their business to grow, and this often includes hiring employees. Adding staff to an enterprise frees up time for an owner to focus on strategy and long-term projects and step out of day-to-day tasks, such as ringing up customers at the cash register or making sales calls. A TD Bank survey of small businesses in 2015 found that 43 percent of businesses have at least one employee, and the Small Business Administration (SBA) reports that small businesses account for 66 percent of net new jobs, putting these companies on track for additional revenue growth.

Running a small business is complicated, and often the CEO has job descriptions ranging from chief bottle washer to chief financial officer. Just 23 percent of businesses with employees in the TD survey reported having a financial professional such as a bookkeeper or accountant who handles financial records. In a similar study in 2014, 46 percent of small business owners named bookkeeping among their most hated tasks in running a firm.

Related: What You Need to Know About the 3 Biggest Global Payment Methods

One way for business owners to find relief is to work with a payroll service. Such a service will provide basic services such as calculating pay, tax withholdings and generating direct deposit or checks each pay period. Others offer perks such as online check stubs, time off tracking and apps for employees to view pay information.

Gene Marks, CPA and owner of The Marks Group, said that relying on outside help for tasks outside of their immediate expertise, such as payroll and payment processing is a winning strategy for business owners. "Small business owners who succeed act like executives. They don't ask when something will get done, but who will do it. Business owners who do payroll on their own will never grow. Whether you have one employee or 100, the issues of being an employer are the same and you need a smarter mindset to grow your company."

Related: Looking for a New Payment Company? You're 'Due' for Some Good News.

Contracting with a payroll company isn't only about time savings; employers need to consider compliance issues as well.

"As soon as you hire that first employee, you gain issues you probably aren't aware exist," said Jamie Griffiths, vice president of bank partnerships at Paycor, a strategic partner of TD Bank. "There are nearly 10,000 tax jurisdictions in the U.S., and the constantly changing regulations make it impossible for a small business owner to keep up. A payroll company will alleviate some of that tax and compliance burden."

Small business owners need to be aware of cash management and control expenses, but outsourcing such a time-consuming and burdensome task often outweighs any cost. Having staff is vital for an owner who wants to sell their business in the future to either enhance retirement income or provide liquidity to invest in other ventures. The key is to balance the entrepreneur cost-controlling mindset with paying for appropriate resources that can propel growth or free up critical hours in the week.

"A payroll service adds intangible value to a company," Marks said. "Buyers or investors are looking to acquire companies with policies and procedures in place."

"Outsourcing payroll is an easy thing, but it can make a small business look like a large company," Griffiths added. "This is attractive to bankers and investors, and to potential hires who are weighing the benefits of working for a corporation versus a small business."

Related: 10 Online Invoicing Services for Small-Business Owners

What does this really mean for small business owners? Those who want to grow need to invest in their infrastructure now. Current employees experience myriad benefits, from having a professional determine accurate tax and benefit withholdings to ensuring paychecks are deposited on time, while a business owner profits through work hours cleared to invest in company strategy. Payroll is one area of running a small business where it doesn't make sense to nickel and dime. Paying for help will reap far more in the future for a smart business owner.

Jay DesMarteau

Head of Regional Commercial Specialty Segments for TD Bank

Jay DesMarteau is the head of small business and government banking distribution for TD Bank. DesMarteau leads teams that provide in-depth expertise for unique, small business customer sets of the regional commercial bank at TD. His group provides small business banking products and services across a variety of industries, including the healthcare and restaurant franchise industries.

Related Topics

Editor's Pick

Everyone Wants to Get Close to Their Favorite Artist. Here's the Technology Making It a Reality — But Better.
The Highest-Paid, Highest-Profile People in Every Field Know This Communication Strategy
After Early Rejection From Publishers, This Author Self-Published Her Book and Sold More Than 500,000 Copies. Here's How She Did It.
Having Trouble Speaking Up in Meetings? Try This Strategy.
He Names Brands for Amazon, Meta and Forever 21, and Says This Is the Big Blank Space in the Naming Game

How to Detect a Liar in Seconds Using Nonverbal Communication

There are many ways to understand if someone is not honest with you. The following signs do not even require words and are all nonverbal queues.

Business News

American Airlines Sued After Teen Dies of Heart Attack Onboard Flight to Miami

Kevin Greenridge was traveling from Honduras to Miami on June 4, 2022, on AA Flight 614 when he went into cardiac arrest and became unconscious mid-flight.

Business News

Would You Buy Maggie Murdaugh's Monogrammed Snake Print Pillows? Items From the Murdaugh Family Home Are Going Up for Auction

The sale comes just weeks after Alex Murdaugh was sentenced to two consecutive life terms for the June 2021 murders of his wife, Maggie Murdaugh, and son Paul Murdaugh.


After Early Rejection From Publishers, This Author Self-Published Her Book and Sold More Than 500,000 Copies. Here's How She Did It.

Author Karen Inglis breaks down the strategies and tactics you need to generate awareness and sales for your self-published book.

Business News

These Are the Most and Least Affordable Places to Retire in The U.S.

The Northeast and West Coast are the least affordable, while areas in the Mountain State region tend to be ideal for retirees on a budget.


Alternatives to Layoffs in Tech: Maintaining a Stable Workforce

Layoffs are not always the best option and can often be detrimental to the organization as a whole. Companies can keep a steady workforce while still controlling expenses and adapting to market changes by thinking about possible alternatives to layoffs.