Why 401(K) Payroll Integration Will Save You Time
Offering employees a 401(k) plan is an excellent sign of growth within your company, but it can be an extremely confusing and frustrating process to learn. If your small business is looking for a practical solution to your nightmares, 401(k) payroll integration can save you loads of time and headaches.
When sponsoring a 401(k) plan for the first time, it’s hard to prepare yourself for what’s next. As positive as it is for your company overall, it does have its fair share of demands and challenges.
Don’t worry, we’re going to answer all of your questions below and showcase the various challenges of offering a 401(k) plan and the benefits of 401(k) payroll integration. Let’s get started!
Challenges When Sponsoring a 401(k) Plan
When navigating the challenges that come with sponsoring a 401(k) plan, it’ll largely be broken up into two different categories -- fiduciary challenges and administrative challenges. Both are equally as important, especially when managing payroll at the same time.
The fiduciary challenges are largely due to the strict demands carried by the federal Employee Retirement Income Security Act (ERISA), which states your business must deposit employee payroll deferrals within a specified time frame and must report all deposits on Form 5500 each year.
Failure to do so will result in heavy fines, penalties, and the worst-case scenario -- the federal government auditing your 401(k) plan.
On the other hand, the administrative challenges include having to track eligibility for each employee, the increased number of questions from employees, filling out forms, record-keeping, changes to contributions, and making sure all your calculations are correct.
Whether it’s administrative or fiduciary, these challenges lead to a less-effective, less-productive, and less-focus within the workplace. Recent studies show nearly half of all HR staff have to re-input data often and it leads to an increase of work anywhere from 15-50 hours each year.
Benefits of 401(k) Payroll Integration
Among the many challenges of sponsoring a 401(k) plan and managing payroll, there is a wide range of benefits of 401(k) payroll integration. This is where you effectively team up your payroll and 401(k) systems under one roof to provide stability, consistency, accuracy, and efficiency in a timely manner.
Having these systems separate from each other means doing double the work when adding, changing, or removing an employee. Integrating them, however, can benefit you in the following ways:
- Make it easier to track employee eligibility for the 401(k) plan instead of having to do it yourself.
- Speeds up the enrollment process when an employee is interested and automatically updates your payroll when the enrollment process is completed.
- If there are ever any changes to an employee’s contributions, you don’t need to change the same data in two different places.
- Simplification of managing loans and loan repayments.
Whether you’re utilizing the automatic payroll calculator with 401k or easy adjustments when adding or editing contributions, you can find everything you need with 401(k) payroll integration.
We Offer Practical and Effective Solutions
If you want an easier life, 401(k) payroll integration is exactly what your small business needs. Don’t worry, we’ve got the solutions tailored for you and are ready to share those solutions with you.
We can help you make accurate deposits on time and even automate the process of filling out the Form 5500 each year for your 401(k) plan. The reduced risk of making mistakes and being audited by the government will leave you feeling more confident than ever about sponsoring a plan.
With 401(k) payroll integration, you gain back the time you’ve been losing by trying to handle everything manually on two different interfaces. You need that time to invest in the growth of your company, not the management of the present.
If you want to learn more about our solutions or are wondering does 401k reduce payroll taxes, contact Consultants In-A-Box today to learn more.
- Jordan VanMaanen