It’s that time of the week again…
If you’re a small business, chances are you’re all too familiar with the weekly task of taking out your books to calculate and process your payroll. With 32% of businesses paying their employees once a week, and 36% paying them twice a month, most companies know how much time and energy payroll can take out of their schedule.
Managing payroll doesn’t have to be an arduous endeavor, though. Take a look at these five tips for doing payroll to streamline the process and save you valuable time.
Payroll is one of the most important functions of your business. Without a stable payment system, loyal employees will have no problem seeking other employment. Organize your deadlines, expectations, and information so that employees know what to expect and everyone can get paid in a timely fashion.
Implement a Calendar
A calendar will help all team members to understand key dates and expectations. On your calendar, you can include information including the year’s payment periods, which dates require action from employees, and when employees can expect to be paid.
Create a Universal Filing System
Your business likely stores hundreds, if not thousands, of employee forms. Sooner or later, you will need to access these forms. If you have no consistent system established, this will cause you a lot of trouble.
Design a filing system that orders documents by date and organizes them by type for easy access. Make sure every department uses the same method. This way, no one will have trouble looking for a necessary document.
Also, consider how you will handle current files versus ones that may not be as relevant to your everyday operations. For instance, where will you store files from employees who haven’t worked at your business in five years? What about recent applications?
Stay Current With Legal Guidelines
Legal headaches can cause a significant amount of stress for your business. This is especially true when it comes to your finances. Make sure you’re on track with legal requirements for all of your employees.
Complete Onboarding Paperwork
All employees who start working for you should have certain documents filled in to ensure their employment eligibility. Set aside a time for new employees to complete a direct deposit form, a W-4 form, and an I-9 employment eligibility verification form.
Follow Correct Tax Procedures
You’re likely well aware that employers have tax obligations. But you may not be in the know when these obligations change. State and federal reporting requirements may remain the same for years or change frequently. You must understand what your responsibilities are and stay up-to-date.
For example, your employees will need to fill out a W-2 form and send it to the Social Security Administration.
Other laws that you will have to keep in mind include, but are not limited to, wage laws, filing deadlines, and the best ways to handle disclosing independent contractors.
Take Advantage of Technology
One of the most helpful payroll tips would be to simply reduce the amount of time you spend doing payroll in general. You can continue to pay employees at the same frequency and simultaneously spend less time on the process by using technology.
Outsource Payroll Responsibilities
Payroll software allows you to choose what payroll functions you will be in charge of and what processes that technology will handle for you. If you want to be responsible for processing each payroll, you can manage the system manually but have the software calculate payments and taxes. This way, you can still be involved.
If you’re looking for an even more hands-off approach, look into automation software. It will manage itself independently, including calculating payroll, adjusting for taxes, and processing payroll.
Money is a sensitive topic for many people, which may make employees reluctant to come forward with payroll issues or concerns. Be open about your processes to make everyone on your team more comfortable.
Outline a Policy for Employees
Make sure that you have a written policy that employees can refer to anytime they may have a question. Include information such as how salaries are determined, employee reporting procedures, how employees can report mistakes, and how mistakes will be addressed.
In addition to saving you time from repeatedly answering the same question, employees will have peace of mind knowing what to expect.
When it comes to payroll, your employees will want to know as much information as possible. No employee will complain about emails providing more helpful details.
Send out messages to hourly workers reminding them to report hours and when their next payment will be deposited. Send emails to your team that answers recent questions or common concerns. If there has been an issue with payroll recently, discuss it openly and provide a written reference that employees can use.
Trust Your Team
One of the payroll best practices doesn’t even necessarily involve payroll. Rather, it involves how you interact with your team members. By fostering healthy relationships with team members, all areas of your business, including payroll, will improve.
Ask Staff to Attend Payroll Training
HR and upper-level managers may not be directly involved in payroll. However, giving them a better understanding of how your payroll process works will streamline communication among departments. Once everyone understands common goals, executing your payroll policies will be much more collaborative.
Furthermore, once team members understand your goals, they can provide more adequate and relevant feedback. Is certain software making the payroll process better or more difficult? Do certain departments have trouble following your proposed guidelines? With everyone on the same page, you can troubleshoot and improve problems faster.
Managing Payroll Made Easy
With organization, technology, and teamwork, managing payroll can be one of the most efficient processes in your company’s operations.
Check out some of our other blog posts for more helpful tips to jumpstart your business.