Outsourcing

OUTSOURCING
A Family Business Strategy
With Many Benefits

Outsourcing is smart strategy for growing a family business. It can be a critical step in professionalizing the management style of a family-owned business.

According to Don Schwerzler , founder of the Family Business Institute , “Two secrets to successfully growing a family business: the professionalization of the management system; and the formalization of the family’s communication system.”

Professionalizing the management system of a family business means moving away from an “intuitive” or entrepreneurial management style – to a management style that depends more on information and planning to make decisions.

Investing and building the infrastructure of the business is also a critical requirement for successfully transitioning the family business from one generation to the next.

One area where family business owners often consider using outsourcing is payroll processing. Administrative overhead is tough to control – and assigning the payroll processing function to a professional service provider offers immediate tangible benefits, including compliance with tax laws, confidentiality for the family’s payroll, cost reduction and convenience.

Compliance

The IRS, Social Security Administration and Department of Labor all have special regulations for family companies. An important component of any payroll processing service is that the tax payment service guarantees that all federal, state, local, and unemployment taxes are paid accurately and on time.

Confidentiality

The confidentiality feature of cutting-edge payroll processing systems like Family Pay allows the family business owner to delegate the payroll responsibilities to a non-family member without worrying, keeping the family’s personal information from becoming common knowledge amongst other managers and employees. Most family business owners know that the payroll cycle can control their schedule – the business owner has to be present when the payroll is being processed to ensure confidentiality of the family’s payroll information. One payroll processing company, a second generation family business itself, offers a unique service for family businesses. It is called Family Pay.

Cost Reduction

By using outside resources, outsourcing, for payroll processing, the family business can enjoy the benefits of an entire payroll department for a fraction of the cost. The processing company gives the family business owner the financial reports and information /s/he needs to manage the business in an accurate and timely fashion.

Convenience

By using outside experts to do payroll processing, the family business owner the convenience and peace of mind that once the hours are reported, the payroll processing company takes care of everything else. All of the vital payroll information, reports, and checks are sent next day via UPS or email delivery. The top level payroll processing firms also provides the added convenience of integrating with other employee benefit service providers, including retirement providers, QuickBooks, POS systems, and time clock systems.

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