Using Your Bank for Payroll Processing

Payroll processing can be one of a business owner’s biggest hassles: calculating ever changing taxes and withholding, moving money between accounts to cover payments, ensuring that employee status is properly maintained, and getting it all done by a deadline that waits for no one. Many companies find it impossible to handle this administrative burden in-house so they turn to outsourcing. Letting your bank handle payroll can let you rest assured that payday will run smoothly while you are saving time and money.

It’s definitely more convenient to handle payroll through your bank than to outsource to another provider. If you do your business banking through an online portal, for example, you’ll only have one account name and password to access all your banking and payroll procedures. All of your financial information is in one place, so you don’t have to worry about providing your account numbers to a payroll provider, and you can easily see if you have enough cash in the right account to cover payments. You can set up automatic direct deposit to your employees, or print the checks yourself, so there’s no waiting for an envelope to be delivered to you on payday.

Moreover, using your business bank for payroll processing can provide you with tremendous value. A payroll processor or your own accountant might offer the same basic services as your bank, such as calculating, withholding, depositing, and filing payroll taxes; managing payroll reporting, such as pay period, quarterly, and annual; and reporting new hires to the appropriate authorities, but your bank may offer those services for a lower price while providing these additional benefits:

• Phone support from a live payroll expert
• Online access to employees’ payroll history and W-2 forms
• Online payroll preview that allows you to catch errors before checks are printed or cash is transferred
• Easy interface with common accounting packages and spreadsheets, eliminating redundant data entry
• Human resources services such as continually updated forms and documents

These services are likely more than your accountant can provide and are probably significantly cheaper at your bank than a third-party payroll processing company. Some businesses may have payroll processing needs that are too complex for a bank; but for the majority of small and medium-size businesses, banks provide a secure, convenient, inexpensive way to manage what can be a stressful and time-consuming process.