Payroll can be a deceptively straight-forward aspect of running a business. Poor payroll management can become a costly affair. Your payroll process needs to be accurate and timely.
When it comes time to do your taxes, all of the mistakes or lagging behind of filings catch up. A lot of money is wasted on outsourcing these responsibilities. You can streamline payroll processing without sacrificing accuracy.
First, let’s take a look at different aspects of payroll that can be improved. All of this doesn’t need to be done all at once. You can make improvements and measure your progress.
Each miscounted finance can result in punishments. Inability to adhere to IRS policies is unfortunately common. Organizations need to fix their mistakes while paying fees because of said mistakes. When you are trying to stay out of tax trouble, you must correctly file your payroll.
It is important to be able to comprehend the state and government laws regarding payroll. You must stay up-to-date for any potential changes in tax code each year. In a perfect world, this ought to be done with each compensation cycle.
Now, if you are uninformed about tax policy, that doesn’t mean employees will be. If you aren’t following proper payroll protocols, this could leave you open to lawsuits. Employees that aren’t getting proper overtime or receive incorrect numbers of hours paid will have a case.
Regular audits keep you from getting into any trouble when tax season comes. Whenever you receive an influx of employees who are concerned about payroll, you should be auditing. It doesn’t matter if your system is automated or old school timecards, ongoing audits keep errors to a minimum.
As a matter of fact, errors are usually much more serious when automated payrolls are used. If formula or field is entered incorrectly, that means a mistake could throw off everyone’s pay. Never “set it and forget it” for automated payroll systems.
Modifying fields, such as tax statuses or raises, should warrant a new audit each time. It is worth your time and money to perform audits and avoid costly penalties later on.
A thorough audit means going through from the beginning of the payroll process. Make little tests and check for accuracy of time and number values. Go through your audits with your payroll staff present. Everyone should be on the same page.
Some businesses believe they that paper is safer, so they don’t see the advantage in changing their payroll system. The real crux of the issue here is investing in a digital payroll solution for their business. Some owners are too stubborn for their own good.
Avoid having to dig up receipts, old timecards, or checks saved away in a dusty storage room. Paper is slower, less efficient, and no more transparent than digital payroll systems.
By going digital, valuable data can be accessed at will. This, therefore, makes your auditing process faster and your tax info much easier to compile. Being able to pull up payroll data from years past can help identify trends and correct any leaks.
Employees that need direct deposit can do so seamlessly through a digital payroll. If there’s an error on their paystub, it can be corrected immediately. Processing all these payments couldn’t be easier with a digital payroll process.
This all boils down to reducing human error. Once all the necessary parameters are set, human input is minimal.
Payroll staff needs to be able to quickly and effectively communicate with HR and management. When there’s a break in the chain, that’s when mistakes start to happen. Transparency is also very important when running a business.
The best way to instill confidence with your workforce is to make all payroll easily accessible. Having a clear pay schedule that can be pulled up at a moment’s notice helps workers understand where they’re at. In contrast, an old paper payroll system is rarely accessible and usually only when claims are made.
The irony is that you’re not actually protecting information any better. Digital systems can only be accessed by permitted users. A filing cabinet in a storeroom can be snooped into by those determined enough.
Human Resources also needs to have easy access to this information, too. Small requests or inquiries don’t need to take hours or days to process. All of this can be avoided with a digital system in place.
On top of all of these steps to improve your payroll system, you can still outsource it. Payroll service providers can offload the jobs of a dedicated staff. You can get the same work done, but with a likely smaller budget.
This is a great solution for smaller businesses that can’t afford a large staff. Keeping up with technology and tax code changes can be tough. Partnering with a payroll service can reduce risk, improve payroll software, and more.
Outsourcing doesn’t mean that you are passing all payroll responsibilities onto a third party. Communication with the rest of your staff is still a requirement. Your employees won’t be talking to faceless CSR agents. They take care of the technical side, you reap all the benefits.
As you can see, there’s plenty of room for improvement for the average payroll process. People who are more prone to putting off their tax obligations until the last minute can probably relate. Small business owners often carry over their bad tax habits into their business.
It doesn’t need to be so difficult, you just have to prioritize preparation and putting a plan into place. This is important for complex business payroll jobs, such as contractors and online retail entrepreneurs.
If you need help getting your payroll up to date and into the 21st century, contact us. We’ll show you just how much more efficient your payroll system can be. You have everything to gain and nothing but time and money to lose by standing still.