When running a business, the last thing you want to do is make mistakes with your payroll. Employees are the lifeblood of any company, and if they feel they are being treated poorly, then morale will plummet and you could lose quality talent.
The fact is, most entrepreneurs and business-owners don’t get into it with a knowledge of payroll management. They often find out on the fly that it’s not as simple as it might seem. You need to worry about paying the right amounts of course, but also taxes, vacation pay, benefits, and any laws governing paying employees. Here are some payroll management tips for your company so that you never make mistakes when paying your valuable employees.
Manually managing your payroll will take a lot of time. You need to track hours, double-check amounts, send out checks, and do any number of tasks that will get the right funds into your employees’ bank accounts. You could hire someone to do this work for you so that you could focus on your core business, but that would take a substantial investment. Not only that, but there is a cost if you are issuing paper checks. There are many software solutions out there that offer automated and paperless payroll options that will make your life easier and lead to fewer mistakes.
Get Your Pay Schedules Aligned
If your business has been established for a while, there’s a chance that you have several employees on different pay schedules. When some businesses experience growth, they negotiate payment schedules based on the individuals they hire. It could be monthly, bi-weekly, or something else entirely. However, the most employees you have, the more untenable this situation becomes. You will have to juggle a lot and make sure that you know everyone’s schedule. By aligning those schedules, you will have a consistent payroll date that you can plan for without having to worry about missing one.
One of the concerns for a growing business is having the cash flow to meet payroll on every payday. This is especially true for capital intensive businesses like staffing agencies. When an agency grows quickly and starts making placements, they need to have the funds to pay those employees every week. However, most of the invoices they send to their customers are based on a 30 day pay period. To make sure they have the funds for payroll, they partner with a payroll factoring company to get an advance on their invoices so they can have the cash immediately instead of waiting a month.
Keep Up To Date With Laws and Regulations
The laws surrounding paying employees change more often than you might think. If you make a mistake because you weren’t aware of an update, you could find yourself with more trouble than just annoyed employees. There could be lawsuits, for instance, and legal repercussions. There are many tax laws related to payroll that are always evolving, so make sure that you watch for news of changes and update your policies and accounting procedures accordingly.
Use a Compatible Payroll Software
If your payroll software and your accounting software or other systems don’t work together, then you are just making more work for yourself and your staff. You will have to enter data in at least two programs, and possibly more, depending on your processes. On top of that, the more you are copying data into programs, the more likely it is that you will make a mistake. With integration, data only has to be entered once, and there is little risk of errors.
Just like with any business process, you want to get your payroll right with the minimum investment of time and money. Simplifying will help you do that. For instance, going with direct deposit instead of paper checks will help make things easier on your and your employees. Often simplifying things will also keep you organized. It’s easier to manage electronic processes and store data that way than doing things by hand.
As you can see, payroll isn’t not as simple as counting hours and paying everyone. There is a lot that goes into it, and you certainly don’t want to get anything wrong. By implementing these tips, you can have a strong payroll process that makes things easier on you and the HR department and keeps your employees happy.