Good news for home-based businesses. It's getting easier to make payroll.If you're still doing payroll yourself, you know it's a painful process. Keeping up with all the changes in payroll regulations and withholding tables can be a full-time job. Getting payroll right is somewhere between a challenge and a nightmare. Worse yet, if you make a mistake, your employees and the IRS will read you the riot act.
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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. When you factor in the value of your time and the prospect of penalties if you make a mistake, processing payroll internally can be very expensive.

Have you been thinking your time might be better spent on other activities? If so, it may be time to take a look at outsourcing. The offerings today are better than ever.

WHAT'S NEW IN OUTSOURCED PAYROLL?

Just as your home-based business continues to change, so too have the nation's payroll services. New outsourced payroll solutions on the market can save time and money. More important, 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 situations to call in payroll. Some payroll 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, designed to handle the payroll needs of large corporations like IBM rather than small businesses.

The new breed of outsourced payroll services overcomes these deficiencies by offering simple Web-based interfaces. With Chicago-based SurePayroll's offering, for example, all you need is a Web browser and an Internet connection. Once you enter your payroll data, SurePayroll automatically calculates, deducts, pays and files all taxes. You decide when and where you want to process payroll.

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 are substantially reduced with outsourcing payroll.

Who else has jumped on the Internet bandwagon? In addition to SurePayroll, other leading payroll providers such as ADP, Paychex, Ceridian and Wells Fargo have been rolling out new Web-based services.

SERVICES PROVIDED

So what exactly does a payroll provider do for you? 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.

CHOOSING A PROVIDER

Once you've determined 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 handle the unique needs in your home-based business. 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 like ADP.

Be sure to understand all the costs upfront. Occasionally, additional charges will add up to make what initially seemed a good price not so attractive after all.

If you choose the right provider, you'll be happy and your payroll provider will be happy. Take the time to talk to providers and make sure the offering works for you and your home-based business.

CONTACT INFORMATION FOR PAYROLL PROVIDERS

• SurePayroll — www.surepayroll.com or call (877) 954-SURE
  
• ADP — www.adp.com
  
• Paychex— www.paychex.com
  
• Ceridian — www.ceridian.com
  
• Wells Fargo — www.wellsfargo.com/biz