10 Reasons You Should Do Payroll In-house – Reason #6: Control Your Payday

(sixth post in a series)

Chances are, you already feel like you’re in control of your payday, even if you’re using a payroll servicer. After all, you decided how often your employees would be paid, and you probably also decided when those paydays would occur. Isn’t that control?

Well . . . yes, and no. Yes, those are decisions every employer will have to make, no matter what. But no, there’s more to controlling payday than just deciding where to put it on the calendar.

How a Service Pays Your Employees

A payroll service has a standard system it uses to execute your payroll.

1.  Your HR rep submits the payroll, either over the phone or through an internet connection. This usually must be done at least two days in advance.

2.  The total pay, taxes, and costs are calculated and the necessary withdrawals from your account are made.

3.  Paychecks and direct deposit confirmations are sent to be printed at a central processing center. This could be anywhere in the country.

4.  Direct deposits are made in employees’ accounts when the print run is ordered, usually showing up the night before payday.

5.  The printed checks and confirmations are delivered by courier to your work locations.

If the employer needs some flexibility, there are several roadblocks. The payroll submission deadline is non-negotiable, so any last-minute additions will have to wait a full pay period. When funds are withdrawn is also set in stone; payroll services have a fiduciary responsibility and have to take a “better safe than sorry” because they have so many clients. That applies to both the monies set aside to pay tax payments, and the direct deposits into employee accounts, both of which must occur no later than when the checks are cut.

And if something happens to delay that courier on his appointed rounds, your workers might not get paid that day at all. That something could be as simple as a bad snowstorm in St. Louis, if your checks are printed in Chicago.

How Paying Your Own Employees is Better

Your in-house payroll system doesn’t have to be inflexible, because it’s designed for your company, to address your needs. That means that the unyielding deadlines a servicer has can be bent or broken, without delaying payday.

  • Flexible processing time. A last-minute addition doesn’t have to be entered two or three days in advance — it can be included right up until the payroll is run.
  • Full cash control. That extra day or so gives you more leeway in deciding when to transfer funds. Because you are in control, you can execute the transfers when payroll is processed. It’s flexibility you can’t get with a service.
  • Decide where to print. Print them in-house, or arrange for a third-party check printing. Select a different location if you’re concerned about weather or any other factor delaying the checks from arriving.
  • Ditch unnecessary paper. Why are employees with direct deposit receiving paper pay stubs? Go green and get them emailed to your staff instead.

Take Control of Payday

If you’re frustrated with how inflexible and unyielding your payroll provider is about when you must submit your data, where the checks are coming from, and how the money is transferred, it’s probably time to consider an in-house Sage Abra payroll system. Contact Pacific Data Marketing to get an analysis of your payroll needs, and learn what your own in-house system might look like.

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