In 2007 a staggering 40 percent of small business owners were charged with payroll tax fines costing business owners more than $1.9 billion. An approximate 20 percent of US small businesses are overpaying on their federal and state disability insurance premiums. Too many business owners take the risk by either assuming that they can handle this arduous 54-step process, or they hire under-qualified staff to run payroll.

According to the US Chamber of Commerce, the biggest risk you face in administering your payroll tax obligations is that you can be held personally liable for all income and FICA taxes that you willfully either fail to withhold from your employees’ wages or fail to pay to the IRS and your state tax agencies. Even if your conduct was not willful, you may still be subject to penalties.

PayPro Services, a local Claremont payroll service provider, suggests small businesses consider outsourcing all payroll tasks to industry experts. Small businesses have so many affordable and reliable resources available to them and they are easy to find.

“Be wary,” warns Edgar W. Reece, CEO of Reece Capital Ventures, LLC, parent of PayPro Services “Do your homework before hiring just any service.”

Automated options such as the PayPro’s system allow the business owner to control their payroll without error. These systems are usually more affordable than the larger services and offer more “bang for your buck.”

Often times payroll services have hidden fees that quickly accumulate and leave the small business owner with a much higher bill than initially expected. Look for providers that include all the features your company needs without any additional recurring monthly fees. The industry standard until now has been to charge the business owner an additional fee for every service add-on. This is just not feasible for most small business owners trying to survive in today’s tough economy.

Technological advances have created absolute accuracy. The antiquated methods of the manual service are no longer trusted because you can never overcome the risk of human error. No matter which payroll company you select, get an accuracy guarantee in writing. Your current payroll provider or CPA should be accountable for any inaccuracies in their service, and should be liable for any penalties you incur due to their mistakes.

Many small businesses opt to hire a CPA or Bookkeeper to handle these services. If this is the case, ask for itemized billing statements outlining the hours and services for which you are being billed. Always compare these services and determine if it is possible to outsource selected services for less. Even if you pay a flat quarterly fee, you can always negotiate a better deal.

Jeremy Cooper is a small business payroll specialist with eight years experience in the financial services industry including co-founding of a small business in Covina, California.  Currently Jeremy is a lead member of PayPro Services, the small business payroll specialists, located in Claremont.