It seems that each new year brings additional tasks and an increase in compliance and regulatory requirements into the payroll process. It is an increasing challenge to manage payroll efficiently and effectively, and the consequences of failing to do so can be devastating for a smaller business.
According to a 2013 survey by the National Business Association, over 60% of small businesses still manage their payroll processes in-house. Small or large, every business needs to have a accurate and comprehensive systems in place to ensure compliance and accuracy.
Seven Tips To Manage Payroll With Less Stress
Whether your company is just starting up, or has been around a while and is adding new employees, keeping your payroll accurate and consistent will reduce stress and administrative costs:
1. Update and maintain complete payroll records.
Verify as soon as possible that you do have the basic information from all your employees. This will include Social Security numbers, number of deductions, benefits, employee classification, and any overtime or bonuses. It can be useful to set up a separate file using either Microsoft Excel or a good payroll program. It is critical to keep it up to date. This means your employees must notify you of any changes, preferably before those pending changes actually take effect.
2. Know the deadlines and keep reminders.
For example, any corporate taxes are due by March 15 of each year. All W2s and Form-1099s have to be provided to employees and sub-contractors by January 31. There are a myriad of additional deadline dates that must be adhered to in addition to your own internal deadlines based on your pay schedules, etc. Having a solid system in place for tracking and flagging impending deadlines is critical to avoiding costly mistakes.
3. Use payroll management software that meets the needs of your business.
By choosing a good payroll software for your company, you will make it easier to access all of your payroll information in one place, whenever you need it. One of the greatest benefits for payroll management professionals is the vast array of powerful and comprehensive software tools available to them. Whether cloud-based, or installed software, having the latest and best HR tools can make your payroll management and HR work far more efficient and manageable.
Many powerful tools are designed for small to mid-sized businesses. Cost vary significantly, but the investment of a wise choice of tools will pay huge dividends in time savings and efficiency for your HR department.
4. Understand the rules.
Despite the horror stories and sometimes overbearing weight of regulation and enforcement, government tax agencies can serve to help your business. The IRS, state and local agencies provide a wealth of resources and tools to help with compliance on what they require. Make liberal use of these agencies and take advantage of any tools and guidelines they offer.
In addition, you will find that they offer workshops for small-business owners to help you understand the various rules and regulations,
5. Be proactive with errors.
Compliance is a large part of the work of payroll management professionals. Yet, even with sufficient reminders, calendars, checklists, etc. mistakes can be made. If your company is notified by the IRS, the state tax commissioner or a local taxing agency that a violation has occurred, or that money is due, address the issue immediately.
As difficult and unpleasant as it may be, every day that goes by without rectification of the error will cost you money in interest and penalties. Make it a policy to be proactive and cooperative where and when necessary as this will minimize any potential impact of mistakes. This approach also applies to errors made with payroll and your approach with your own employees.
6. Systematize and streamline your payroll processes.
According to a National Business Association survey, not only do more than 60 percent of small businesses still manage their payroll processes in-house, 27 percent of those owners say that they spend between three to five hours per month on payroll. If you haven't already, it is a good idea to simplify your payroll process by hiring a payroll manager.
If having an in-house HR/payroll person is not an affordable option - or your payroll needs require more than one manager, considering outsourcing can be an effective way to both simplify your payroll process while saving you time and money.
7. Develop and document a growth plan for your payroll management.
The approach you use to manage payroll should not be viewed as a static process. As your business grows, so do your payroll and other HR requirements. When your business has a only a few employees, payroll is fairly simple. But as you grow, part of your strategic planning must include expanding and upgrading your payroll processes, systems and tools needed to manage them.
This can include adding personnel, upgrading software, investing in more equipment, or making the shift to an outside payroll management service. Having a plan now will minimize headaches and costly errors later.
You can manage payroll more efficiently
The key is to think strategically, and act tactically. In other words, anticipate your needs and expected growth while taking steps today to improve and streamline your current processes and systems. In many ways, your payroll process can be seen as the engine that helps run your business. Paying your employees as cost-effectively as possible makes good fiscal sense!
With the wide variety of tasks and accountabilities HR professionals are responsible for managing, having the best tools at their disposal becomes an ever-present concern. Programs evolve, technology changes, and what was purchased and installed three years ago, for example, may not be sufficient for today.
And while investing in the best available software for your HR functions is a viable option, another direction you can consider is outsourcing. This can be simply outsourcing one process such as payroll. However, with a full-service provider such as Accuchex, you have additional options for outsourcing as well.
Let Accuchex help you in managing your HR needs, payroll processes, and staying on top of compliance demands. Get your Free Download: Payroll Outsourcing Guide to help you make an informed decision or call Accuchex Payroll Management Services at 877-422-2824.