For small business owners and entrepreneurs bringing on their first employees, the rules, regulations, and process changes can be overwhelming. Payroll is arguably one of the most important protocols to perfect to foster a healthy relationship with employees.

There are a lot of myths and misconceptions about payroll. Let’s clear those up so you can start paying your employees in a way that doesn’t cost you too much extra time or money. Here are five common payroll myths, busted.

Myth One: Payroll Service Providers Only Work with Corporations

Once upon a time, this myth was likely true. When payroll service providers initially started offering their services, the target would have been large corporations who could afford to make a significant investment. Or, more likely, the target market was businesses with enough employees that they couldn’t afford not to use these services, especially if their competition was.

Now there are payroll service options for everyone, from traditional Mom and Pop shops with fewer than ten employees to moderate startups and beyond. Don’t let the idea that your business isn’t big enough deter you from looking at your options. 

Myth Two: Payroll Services Only Process Paychecks

Again, this is a myth rooted in truth. Fortunately, times have changed. Payroll service providers saw an opportunity to add value to their offering by covering other aspects of HR management, rather than focusing solely on accounting software.

HR Payroll Systems not only help with processing payroll, but also assist with employee onboarding, allocating benefits, and processing tax forms. Some systems even integrate performance review protocols, and assist with the onboarding process. 

Take a look at what other services might benefit your business and look for a payroll provider that offers more.

Myth Three: Payroll Software Doesn’t Work with Modern Businesses

While it’s true that the payroll service providers of yesteryear likely wouldn’t be beneficial to modern startups, they aren’t frozen in time. Many providers have adapted to the changing face of business. The others have fallen by the wayside.

With so many businesses using remote workers and independent contractors, traditional payroll doesn’t always fit the bill. However, there are still taxation considerations to keep in mind when outsourcing and accounting tracking that needs to be done when paying an independent contractor. Payroll is still a logical business process in modern businesses.

Myth Four: Doing Payroll Takes a Lot of Time and Money

Yes, working through payroll does take a bit of time. However, with the right software and procedures in place, it can be as easy as the click of a few buttons. If you’re still manually adding up timesheets and entering them in Excel, it’s time to step into the 21st century.

AI and automation are making significant changes in how businesses operate in recent years. Using this technology to track employee hours, forecast peak scheduling seasons, and even send employees text reminders about shifts can simplify the payroll process and improve standard operating procedures.

Myth Five: It’s More Affordable to Handle Payroll In-House

This is a myth that businesses have been using to justify their fear of change for years. For a small business owner, resources can be tight. However, when you measure the opportunity cost of having to process payroll, stay up-to-date on taxation protocols, print tax forms, submit ROEs, etc. it adds up in a hurry. 

For large businesses, the alternative is having an employee handle payroll and compensating them for doing so. While the hourly wage or salary is easy to calculate, the cost of hiring and onboarding gets a little vaguer. There are a lot of affordable options for outsourcing payroll that won’t break the bank.

Tips for Improving Payroll Practices

Fortunately, you can start making changes to your standard operating procedures to streamline your payroll right away. Start looking at payroll systems that offer a centralized platform for your HR and accounting needs. 

While it can take time to find the right provider and implement the changes, creating a project management plan to get this done is the first step. The same theory applies to outsourcing your payroll processes. If you determine this to be a viable option, start outlining the process now and planning for change management.

Regardless of the options you choose, look at ways you can streamline the process beyond changing the software used. Investigate going paperless. Not only does this contribute to an eco-friendly marketing strategy, but it will also cut costs over time. Regulate pay processing so that monthly and bi-weekly payments are in alignment.

Finally, remember to offer an environment of continuous learning and support. Regular training on updated practices and ever-evolving taxation requirements will keep your staff ahead of the curve and your process efficient.

If you’ve been using these myths as an excuse not to bring your payroll practices into the future, it’s time to start making changes: your success depends on it.