You can do payroll one of two ways: manually or online. Many businesses prefer to do their payroll manually, believing it’s an unnecessary expense, but this process eats up an exorbitant amount of time. Online payroll services can actually save businesses so much money that after about a year, these businesses have recouped their investment and then some.
How is that even possible, you wonder? Let’s take a look.
First, consider how much time per staff member it takes to complete payroll. Doing it manually takes about 11 minutes per staff member, while using online payroll programs takes only one minute and thirty seconds to do.
Secondly, consider how many employees there are to do payroll for. For a small startup business with only 10 employees, it’d take about 110 minutes to do payroll manually, while it’d only take online payroll systems 15 minutes minutes to do. Naturally, the more employees a company has, the more time saved. Take a small business with 50 employees–five times as many as the previously mentioned startup. It’d take a manual payroll method nine hours and 10 minutes, while online payroll would only need one hour and 15 minutes.
Thirdly, consider how much time is saved over the entire year. Using a manual method, the payroll manager of a company with 50 people would spend 15.5 days of the year doing payroll, while a manager who uses an online payroll method would only spend two days of the year doing it. That’s a difference of nearly two weeks worth of labor.
Lastly, consider the cost of this lost labor. The average salary of a payroll manager is about $87,000 per year, according to Salary.com. This means that a company who does its payroll manually loses about $3,132 of labor each year.
Although each company has the freedom to choose how it wants to do payroll, the choice is pretty obvious. Online payroll methods are both time and cost efficient. If you have any questions, feel free to ask in the comments. Helpful research also found here.