You may be running a business with ten employees or you may be running a business with 300 employees. Either way, a payroll management system is necessary to help you stay on top of the financial portion of your business. A payroll system saves time and it also protects you from any mistakes that could get you in trouble with the IRS, or Internal Revenue Service. It is likely that the primary functions of your business are keeping you busy so it is a great idea to consider using a payroll service company. Not only will a company of this type help you with your payroll needs but also often your insurance, retirement plans and even human resources functions.
If you are just a start up company and have not yet figured out the details of your payroll management there can be a lot to take on that can overwhelm you. Before you can even begin the interviewing process to hire employees you have to apply for an EIN, or Employer Identification Number. This number is how you report your tax information and submit other documents through the IRS. Once you have employees you need to have your people complete forms such as a Federal Income Tax Withholding Form (W-4). You need to calculate how much income tax will come out of each employee’s paycheck, you need to set up a payment schedule, document each and every cent you compensate to your employees and more. All of these steps can be very overwhelming and the process payroll management to your employees can take up days at a time every couple of weeks if you were to try and do it yourself. A payroll management service company will allow you to pay your employees, record everything, report your information and more. This leaves you with much more time to focus on the more important aspects of your business; ensuring that you are successful.
The following are tips that you need to check out to help you with your payroll management:
Keep Proper Records
From the first form you fill out to obtain a tax ID number to the last cent you have paid out to an employee, all of this information and forms need to be properly filed away in order to protect your business. You need to keep copies of W-4 forms, time sheets, overtime, vacation time, initial contract agreements and much more as part of proper payroll management. Depending on what State you are operating in, you may be required to keep your records around for a certain number of years. This is true for certain federal laws as well. All of these records can get quite overwhelming. You need them on hand to protect yourself and your business if the IRS comes looking for more detailed information but it can be hard to keep track of everything. A payroll management company can assist you with this record keeping; making sure everything is kept organized and help you make sure that you have everything on file that you need in case of an audit or legal concern.
Whether you pay your employees weekly, every two weeks or once per month, there is a set equation you must follow to come up with the exact amount each employee earned. This is often based on hours worked. From that amount you need to subtract tax amounts, healthcare costs, etc. It is imperative that you do not forget to have the money allotted to the right places. The money you take out for these other items needs to be sent to the appropriate place and on time so there is no lapse in coverage for your employee and such. This can be overwhelming when you need to pay out a number of employees at any given time and it is often much easier to have a third party payroll management company focus on these duties for you.
Payroll Management Administration
There are all kinds of resources available now that allow your employees to track their own hours worked and report them to you. From the convenience of their computer they can request days off, submit time sheets, look at their healthcare plan, past pay stubs and more. Putting some of the control into your employees hands can save a lot of time later on. Also, employees appreciate having this control.
Look For Help
There are a number of resources available online that can help you figure out your company’s payroll management system from start to finish. Also, there are a lot of factors involved with a payroll system that business owners might not be aware of. The IRS has a comprehensive guide that helps you understand all of the different aspects of this portion of your business.
Hiring a good payroll management company can help take a lot of the burden of payroll management responsibilities off of your shoulders. You are in fact running a business and there is already a lot that comes along with that job. There are a number of reputable payroll management companies around but you will want to find one that fits the criteria you have for your business and your employees. A payroll management company who will provide all types of services to you from one location is ideal and you will want that company to be easily accessible if you have issues or questions.