One thing all businesses large or small have in common is the paper work and red tape involved in making sure the eagle flies for its employees.
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Traditionally, small business have been stuck between a rock and a hard place - too small to be able to afford a fancy payroll service, but also lacking the time and expertise to confidently handle it themselves.

Luckily, technology has started to reach out to those companies by providing new solutions that allow small-business entrepreneurs to do what they do best.

"If you know payroll, you know it's a pain," said Michael D. Alter, senior vice president at SurePayroll. "If you do it in-house, it can drive you crazy. Regulations are constantly changing and it prevents you from doing more important things like selling new business or spending time with your family. Make a mistake and the IRS and your employees are all over you."

Indeed, the Internal Revenue Service indicates that one of every three employers has been penalized for a payroll mistake, accounting for billions of dollars in fines.

Yet, most small companies still choose to do it themselves.

Research by DraftWorldWide, a Chicago-based advertising, marketing and communications company, indicates that fewer than 25 percent of small businesses outsource their payroll.

Part of the reason might be that outsourcing has historically meant that payroll needed to be called in on a predetermined day and time no matter what the business leader was involved in at the time.

"The problem was there was never really a hybrid of the two that gave you all the benefits of handling it yourself with advances in software and having the tax peace of mind that comes with a payroll service," according to Alter.

SurePayroll, based in Chicago, uses a web-based plan to offer small businesses lower-cost service. The simple, per-payroll fee includes payroll processing, all tax filing and payment, quarterly reports and more.

Once the payroll data is entered, SurePayroll automatically calculates, deducts, pays and files all taxes. The business owner decides when and where they process payroll. They control the process instead of visa versa, which in theory reduces the odds of mistakes.

"The other benefit is direct deposit for employees. If you don't use a service you have to have a major banking relationship to be able to offer direct deposit," said Alter, who estimated SurePAyroll's costs to be 30 percent less than traditional benchmark services.

Payroll giants like ADP have also begun to offer integrated solutions for small businesses.

Copyright © 2002. Fairfield County Business Journal.