Summary: Need help with PR? If you are looking for a great PR firm, you've found one. Walker Sands is a leading Chicago PR firm with a strong track record that makes it one of top national PR agencies..

If you're still doing payroll yourself, you know that it's a painful and time-consuming process. There are so many regulations and withholding tables to keep track of, and just when you think you understand them, they change. It's a small miracle if you get everything right.

Make a mistake on payroll and your employees lose faith in you - unless you overpay them, in which case you may never find out about your error.
(article continues below useful links)

Adding insult to injury, if payroll's wrong or filings are late, the Internal Revenue Service will soon be knocking on your door with a penalty notice. The IRS says 40 percent of small businesses are fined for payroll errors each year, for an average fine of $845. In total, that adds up to billions of dollars each year.

When you factor in the value of your time and the prospect of penalties if you make a mistake, processing payroll on your own can be a very expensive proposition. If you're feeling some payroll pain, it's time to take a serious look at outsourcing. There's never been a better time to look at it than now.

What's new in outsourced payroll? The nation's payroll services have undergone a major transformation in recent times. New outsourced payroll solutions on the market can save time and money. More importantly, they let you stay in control throughout the process.

Historically, outsourcing payroll meant you needed to call in payroll on a predetermined day and time. Business owners inconveniently had to jump out of important meetings to call in payroll.

Some providers offered software solutions, allowing data to be entered locally and sent in via modem. While this represented a step forward in terms of convenience and control, the software was too complex and designed to handle the payroll needs of large corporations like IBM rather than the simple needs of small businesses.

The new breed of outsourced payroll services overcomes these deficiencies by offering simple Web-based interfaces. You decide when and where you want to process payroll. You control the process instead of vice versa. Once you enter your payroll data, companies can automatically calculate, deduct, pay and file all taxes.

And there's an added bonus. Since you enter the data yourself and view the results in real time, you don't have to worry about a data entry clerk making errors when you give her the information on the phone. The odds of an incorrect check or direct deposit amount are substantially reduced.

So what can you expect from a payroll provider? Payroll services calculate payroll and withholding obligations. They process the checks or provide direct deposits into your employees' accounts. They take care of all the government filings with federal, state, and local tax collection agencies and issue W-2s for you. They also will provide you with management reports that let you track and monitor your payroll.

If you determine that outsourcing payroll is an attractive alternative to in-house processing, the trick is to choose the payroll service that's right for you.

First and foremost, make sure you like the way you'll be processing payroll. If you're frequently on the road or like to do payroll whenever you choose, you may want to choose a provider that offers a Web-based service. If you prefer to give your information to a customer service rep, choose a provider that offers a call-in service.

Make sure your payroll service can address your unique needs. Most services will handle your basic needs - for example, if you have to pay payroll taxes for multiple states. But if you have complex needs, you may have to go with a larger provider.

Be sure to understand all the costs up front. Occasionally, additional charges will add up to make what initially seemed to be a good price not so attractive after all. Now is a good time to buy because the online payroll services have lower infrastructure costs and are passing on those savings to small businesses.

If you choose the right provider, you'll be happy and your payroll provider will be happy. If you try to put a square peg into a round hole, you'll find that neither you nor the payroll provider will be happy. Take the time to talk to providers and make sure that the offering works for you.

Michael Alter is a senior vice president at SurePayroll. www.surepayroll.com, 877-954-SURE

Copyright © 2003. Nashville Business Journal.