Reference no: EM133154071

Each of the scenarios highlights a decision point in a typical small business where outsourcing payroll should be considered. For each scenario, you will need to think about what outsourcing model you would recommend and discuss the advantages and disadvantages of your selection for that scenario. You may also need to think about any additional factors that need to be considered before making a recommendation. List those factors and explain your answer.

Scenario 1

You've finally hired enough employees that there's just no way to justify them as "contractors" and your tax preparation fees have tripled as you try to sort things out at the end of the year. Your business is growing, and you need to get some basic structure in place.

Scenario 2

You're a healthy mid-sized company with a couple of million in annual revenue and a single staff accountant whose time seems to be completely monopolised with processing fortnightly payroll for your 20+ employees. It's a miracle when bills are paid on time and don't even talk about collections on those old invoices. You'd like to refocus that accountant on activities that actually bring cash in the door.

Scenario 3

You've grown still further into the lower middle market and you now have a dedicated AP clerk, AR accountant, and a controller. Unfortunately, your controller's time is still wrapped up in that pesky payroll though you'd really rather have their help analysing your financials to prepare management reports and budgets.

Scenario 4

You're in negotiations to sell your company and the buyer's due diligence reveals you owe $75,000 in payroll withholdings from Scenario

Answer these questions below for each scenario with your recommendations and reasons.

A-What Outsourcing Model would you recommend, and why?

B-Advantages - Disadvantages

C-Additional Factors that may need to be considered