One of the most important factors in running a successful business is the overall satisfaction of your employees. Engaged employees are more likely to stay with your company for the long-term and to produce exceptional work results. The easiest way to continue to keep your employees happy is by paying them correctly every pay period. The payroll process can be complicated. Failure to comply with legislation that governs the payroll process can result in penalties for your business. Luckily, there are many tips that can help make your payroll process easier.
Tip #1: Be timely
As stated above, simply paying your employees on time is the easiest way to keep them happy. If using a payroll vendor to manage your process, know their requirements on when to submit your payroll for timely processing. Many vendors have different deadlines. Waiting until the last minute can cause unnecessary stress and pressure, opening the door for mistakes. Furthermore, should errors occur in the data entry, there would be ample time to make corrections if your payroll has been submitted prior to the deadline. Other factors such as banking holidays, low account funds, internet issues and more can delay your process. Being timely allows you to remedy all of these issues without your employees seeing a disruption in pay.
Tip #2: Organization
Organization is key. Keeping accurate records of payroll prevents penalties for your business. Incorrect payroll submissions can result in additional banking fees and unhappy employees. If adding employee time manually, double check for errors prior to submission. Setting up your employee deductions and any wage garnishments correctly for each employee will save time and reduce errors each pay period. Keep all of payroll information and reports together in case of an audit.
Tip #3: Be knowledgeable
Another important factor in running a smooth payroll process for your business is to be knowledgeable. Take the time to do research on some of the compliance issues surrounding payroll. The Fair Labor Standards Act governs businesses on topics such as:
Additionally, knowing your business tax liabilities can save your business money in potential fines from the Internal Revenue Service. Correctly calculating the withholdings from your employees, and your responsibility to match or pay taxes, can help your business when it comes to paying quarterly taxes. Severe underpayments of quarterly taxes can result in your business having to pay huge amounts when your business tax return is due. Similarly, knowing how your employees should fill out the new W4 will help your business withhold proper tax amounts.
Tip #4: Automate the process
Automating the payroll process will reduce your administrative burden. Using a payroll software, like isolved, to manage your payroll process will save your HR staff significant time. An automated software will reduce errors and improve your organization’s financial health. Employee time entries, tax withholdings, benefit contributions, multiple direct deposit accounts, expense reimbursements and more can be setup in the system for accurate tracking. Trying to manage these items manually is difficult and unnecessary.
Tip #5: Outsourcing payroll
Similarly to automating the process, outsourcing to a payroll vendor can save your business significant time and money. Your staff can focus on revenue producing tasks as opposed to being bogged down in the tedious payroll process. Outsourcing is a great way for your business to maintain compliance. Legislative changes are frequent and complex and a payroll provider is generally better equipped to handle them. Often times, businesses can save money by outsourcing their payroll. According to Indeed.com, administrative staff can costs business an average of over $40,000 per year in Maine. Outsourcing these tasks has significantly lower costs than the salary of a payroll specialist.