As a restaurant owner, what are the top two biggest expenses for your business?
Food and labor.
And what are the two most time-consuming and critically important tasks for your restaurant?
Managing inventory and payroll.
Since about 80% of all restaurant owners started out as entry-level restaurant employees, it’s unlikely that you opened a restaurant to spend your time processing vendor invoices, measuring cash flow, or calculating payroll.
You would probably prefer to spend your time thinking of new dishes to serve your customers and how to improve your service, rather than crunching numbers in the back office.
However, as a small business owner, you’re probably personally spending about 5 hours every pay period (that’s 21 days a year!) just calculating payroll taxes, or you might be paying an employee just to handle your company’s payroll on a weekly basis.
Payroll software is often one of the first purchases a business makes and is one of the most important investments. For this reason, many business owners are reluctant to replace or upgrade their payroll system basing their decision on “don’t fix what isn’t broken.”
However, an archaic, in-house payroll software often requires time-consuming, expensive repairs and must be manually altered or updated to keep up with changing payroll compliance regulations.
A managed payroll service may be the answer to freeing up more of your time, cutting costs, and letting you pursue your passion in the restaurant industry.
What is a managed payroll service?
Simply put, a managed payroll service outsources all of the tasks necessary to manage, maintain, and automate payments to your employees on a regular basis while remaining compliant with payroll and tax regulations.
A managed payroll service offers a solution that alleviates the drudgery of manually entering your own data, while nearly eliminating the risk of human error that can take place when tracking and processing your payroll in-house.
A managed payroll service assumes responsibility for:
- Payroll tax and deductions
Calculating payroll tax and deductions, including FICA (Federal Insurance Contributions Act), Medicare tax, federal unemployment tax, and child support.
- Federal compliance and tax liability
Maintain compliance with FLSA, ACA, EEOC, and calculate tax liability, submit reporting, and issue federal forms.
- Checks and direct deposits
Write and mail checks for hourly, salary, and bonus compensation and reconcile employees’ direct deposits.
- Data maintenance
All of your employees’ payroll information is backed up daily and stored securely in the cloud, where it can be accessed remotely by you at any time.
- Updating records
An employee self-service portal alleviates the need for you to keep track of every employee’s SSN, address, and legal information, and lets your employees have a simple way to obtain pay stubs without burdening you
Selecting a managed payroll service
Understanding what to look for when selecting the best-managed payroll service for your business will help prevent problems, reduce overhead costs, and provide a service to keep your employees satisfied.
It should reduce costs, save time, be an easy-to-use tool for management, and improve employee satisfaction.
A managed payroll service should:
- Eliminate the need to call an IT professional, wait months or years for a code change, and provide non-technical staff with simple steps to configure the system for your needs
- Provide a secure way to enter and store employees’ Personally Identifiable Information (PII), such as SSN, full legal name, email, and bank account number, while offering an easy-to-use self-service portal
- Achieve your goals for serving your employees, saving time and money, and eliminating the headache of process payroll, all while fitting within your budget
What are the benefits of a managed payroll?
There are several benefits of using a managed payroll service, from saving money to the greater peace of mind that comes with hiring a team of professionals to manage your payroll.
A managed payroll service integrates with your other software systems (and may even eliminate the need for some) to ensure employees receive, accurate, on-time payments.
Peace of mind
One of the greatest benefits of outsourcing your payroll is peace of mind. QuickBooks Payroll recently commissioned Kelton Global to survey 1,006 U.S. small business owners in November 2019.
According to the study, 79% of business owners find it hard to manage their payroll tax, and 70% said varying labor laws across states make it harder to keep up.
The IRS announced its plans to increase tax audits for small businesses by 50 percent in 2021. In the Kelton Global survey, 1 in 4 businesses came under IRS scrutiny, with many resulting in audits and fines.
Even if you aren’t fined, an audit can call the last three to six years of your company’s financial records in for review.
A managed payroll service provides a fully-transparent view of your organization’s finances and expenses by integrating with other accounting and finance systems.
With Navrae, all of those services are rolled into one package, saving you overhead costs on additional software fees.
Having a managed payroll service helps ensure you’re compliant with all of the laws and regulations and that your payroll tax is paid timely.
These two things can help you avoid an audit, or in the rare chance that you are audited, can provide a transparent picture of your company’s payroll and resolve the audit quickly.
Controlling & lowering costs
Managed payroll services for your restaurant’s employees can help your organization cut down on major overhead costs from payroll. With a centralized service and a team processing all of your payroll needs for you, you save money on:
- Software costs and fees
- Paying a back-office employee $21-27 an hour to process your payroll
- Supplies to print and mail checks
- Reprinting checks when a check is lost or delivered to the wrong address
- Easily pay employees of all types (salary, hourly, part-time, or gig workers) at all of your restaurants
- Let employees update their own information and request pay stubs through an online self-service portal
By taking away the time-consuming task of processing your own payroll you not only save time on a weekly basis, you also save time when it comes to annual tax filing. About 40 percent of business owners spend 80 or more hours per year on taxes, payroll, and working with accountants.
A self-service employee portal provided through a managed payroll service offers a simple, consistent experience for your employees that allows them to update their own information (SSN, address, payment options, etc.) or request pay stubs from anywhere with an internet connection.
A managed payroll service that uses automation, like Navrae, can anticipate needs and reduce human error. Common processes, such as new employee onboarding, can be automated to follow the same checklist and process to ensure nothing is missed.
If you plan to open a new restaurant or make a major change to the structure of your business, a managed payroll service can handle the majority of the startup tasks of creating new employee profiles, entering personal information, and can adjust automatically for the new regulations or laws in that area.
Many restaurant owners are currently rehiring or hiring new workers at a higher wage and giving their current employees raises to meet demand and stay competitive in the industry. Navrae provides you with a hassle-free payroll service built specifically for restaurants that has preconfigured options that are easy to customize for your own business needs.
A managed payroll service not only provides transparency of your payroll for outside interests but for you as well. Having a clear-cut view of your labor costs is a cornerstone to cash flow forecasting and managing overhead costs. Once you’ve identified your major costs each month, it’s easy to analyze your profit and create a concise Business Continuity Plan.
Investing in a managed payroll service that meets your business needs just makes good sense. You can reduce labor for yourself or payroll employee(s), provide your employees with easy, secure access to their pay information, and alleviate problems with compliance.
Navrae provides the ideal managed payroll service to meet your current and growing business needs, while also providing an automated inventory and accounting system to further reduce overhead costs and time spent handling your back-office tasks.
If you’re interested in how Navrae’s services can help you manage your restaurant’s finances, contact us here.
We look forward to hearing from you.