To say that starting a business is challenging would be a massive understatement. You will come across quite a few roadblocks, and you will want to quit at times. Yet, if you persevere, you will find that the rewards are well worth it. The best thing you could do to make your ride a bit easier is to prepare for the obstacles that most businesses face, starting with the payroll. Problems with payroll result in disgruntled employees and a host of problems that you could definitely do without.
These are some tips to help you better manage payroll in your business.
1. Keep Things Organized
If there is one thing that payroll needs more than any other department in a business, it is order and organization. The payroll processing document needs to have a certain order that only changes if something changes with the staff. Speaking of that, you need to keep track of your employees and their activities in an orderly fashion. You need to know, at all times, who is on sick or paternity/maternity leaves, eligible for bonuses or sick pay, or having their pay docked. Keeping such details organized will help you avoid underpaying or overpaying any of your employees, and will make the payroll processing a lot simpler for the specialized team.
2. Use Technology
Fortunately, over the years, new software emerges and online solutions are presented to help businesses manage payroll more efficiently and faster. These resources can make your payroll staff’s lives a lot easier and help them avoid any mistakes with salaries. With some of these tools, as you’ll see if you go to their website, you will have several options that you could choose from. You could get systems to completely manage the payroll process for employees, relieving you of that nuisance. Such systems minimize the chances of any errors happening, which is great for business.
3. Understand Rules and Regulations
When it comes to payroll, you have to regularly keep track of rules and regulations, as well as any updates with either. The last thing you need is being penalized or sued by an employee because you neglected the rules and regulations when it comes to paying your staff. So, always have the dedicated team keep track of any changes to payroll legislation so you could be prepared for auditing and present sound tax returns.
4. Create a Budget
Creating a realistic budget will help you manage your payroll more than anything. You need to be able to create a clear forecast of the money flow in the future, so you could predict whether or not you will encounter any problems with paying your employees. Such a budget will also account for overhead costs and taxes, which will help avoid any hiccups down the road. Moreover, when you have a clear forecast of the money flow, you will know whether or not you can hire new people, and if it would affect the current payroll.
5. Take Shortcuts
The best thing that you could do for your payroll process is to keep it simple. Don’t overcomplicate things, and take shortcuts whenever possible. Instead of using checks to pay your staff, switch to direct deposit, which is faster and more reliable. This kind of switch means you won’t need to track every check, not to mention prepare them. A direct deposit is easily traceable and minimizes the paperwork needed.
6. Use Electronic Tracking for Attendance
It doesn’t make sense to be using a sign-in/out timesheet in this day and age. Not only does it make room for dishonesty, but it is also much harder to keep track of everyone using the timesheet and there is much room for human errors. Instead, use electronic tracking of time and attendance and connect it to your payroll sheet directly, and it will make deductions and bonuses much easier to calculate.
7. Review Employee Classification
Misclassifying employees is a leading cause of payroll problems and errors. You need to regularly review employee classification to check who are staff, part-timers, contractors, and temps. This will help you avoid any errors in calculating paychecks. You should also be mindful of employee grades to avoid mixing managers with junior staff, for example.
With some consideration and planning, payroll does not have to be a nightmare. Use technology and the available software whenever possible to make the process simpler and faster. You should also constantly review your process to look for any loopholes or recurrent errors so you could get rid of those. Last but not least, make sure you create a realistic forecast of the money flow for your business.