Tips On Small-Business Payroll
Let’s say you’re a small business that doesn’t have enough employees to warrant an entire human resources department. At the same time, the idea of manually doing payroll just doesn’t suit you.
After all, who wants to tackle payroll when there are estimates out there claiming payroll can take an average of 18 hours per month? That’s a lot of time to allocate toward one process, especially when you have so much else to do.
However, you need to pay your employees something, and payroll is the way to do that. So, what can you do to streamline your payroll process? There are a number of options you can explore.
Come up with a payroll schedule
Decide on a payment schedule that you can stick to, and establish it as the official payroll schedule. If you need a premade calendar, you can turn to the National Finance Center for easy-to-download options.
Make your payroll taxes automated
One of the most important steps you can take is to automate your payroll processes. Look into your options for payroll software packages and providers. Make sure the package or service providers you choose are verifiable and guaranteed in the event of an audit.
Properly classify those who work for you
Assess the status of the people who work for you, and make sure you classify each employee appropriately. If you’re not sure which classification suits them best, refer to the official IRS classification guide. This will help you determine whether your workers are independent contractors or full-time employees.
Double-check all data entries
It’s in your best interest to have multiple eyes look over your data entries. Even the smallest of errors can cause major issues, so make sure you do your due diligence to avoid mistakes.
Make valuable use of software
Utilize software but don’t rely on it as though your life depends on it. Overly relying on software can put you in precarious positions, so always back up the software systems you use. The right software for you should be easy to use and cost-effective while freeing up your time and energy to focus on other matters.
Understand payroll rules and regulations
Make sure your payroll process is in compliance with applicable rules and regulations. If you need help understanding whether your payroll process is compliant, take a look at the American Payroll Association’s guide to state payroll laws.
Hire a payroll manager and an accountant
It’s best to appoint someone who has experience in the realms of HR, business, finance or accounting. Consider talking to them about taking on responsibilities associated with payroll management.
Make sure you keep tabs on all records. Pay attention to how much you paid whom and when. Look into the retention requirements regarding wages in your state. While the IRS expects businesses to maintain records for three years, this statute may vary from one state to another.
Always automate the process of calculating your employees’ wages and tax withholdings. Keep a log of how many hours each of your employees works per week and transfer that information to your payroll software for safekeeping.
A lot of people assume that payroll will always be a headache, but it doesn’t have to be that way. With the help of providers, software or professionals, you can ensure that your employees are paid on time every time.
By calling upon the help of other people, you can accurately pay your employees via direct deposit, document their personal information, stay on top of termination dates and track the classifications, e.g., hourly versus salaried, of those who work for you. You can even learn about ways to integrate all this information into your existing accounting software. The result is the easy tracking of payroll expenses.
Ultimately, payroll options can provide you with a solution that best suits your business needs. The right payroll processes will make your management tasks easier. This means handling employee benefits and providing payroll reports will be a breeze, meaning you can better manage your company and your employees.
As a good rule of thumb, select a payroll process that doesn’t require an advanced degree to implement. Refer to your provider and determine whether there is a self-service employee portal. That way, it’s simple to view all paystubs and end-of-year tax forms when the time comes.
