While some organizations have entire teams dedicated to handling payroll, most small businesses do not have that luxury. Instead, they turn to DIY systems or software to try to handle it internally. But what many companies don’t know is how to set up payroll to ensure that time and talent are instead used toward revenue-generating activities.
Payroll is fundamental to business. And while it plays such a crucial role, too few businesses consider the efficiency of their payroll processes and how streamlined or automated payroll systems can potentially increase the overall productivity of organizations of all sizes. Let’s take a look at the steps and best practices for setting up a payroll system that is optimized for automation and requires minimal management, while still ensuring the accuracy of payroll during each pay period.
Depending on your specific payroll needs, different payroll software and apps available can help you to automate much of the process. When comparing different payroll solutions, consider whether your employees are hourly or salaried, the length of your pay period and which types of information you want employees to be able to access on their own. Would it be helpful if employee were logging hours on their own? Or would you prefer a designated person to approve hours and input them for everyone themselves.
If you are unsure of which payroll technology will best benefit your business, call us for a quick conversation with one of our payroll specialists. They will be able to help guide you toward the solution that will best fit your needs.
The being said, human insight is still a critical component to your payroll process, even with technology to automate some of the processes. Having a person with the critical thinking skills necessary to ensuring accuracy will ensure that whatever software or app you are using is functioning appropriately. Whether it is new state and local laws that may change and require new settings in the system or overtime being miscalculated, there are a number of things a human will catch that a tech solution will not notice on its own.
Furthermore, while many payroll solutions automate many of the processes, there is often data and information that must be inputted into the system on a regular basis. Ideally, the person in charge of overseeing your payroll processes will also be able to dedicate the time they are saving (on repetitive processes taken care of by the app) to thinking about new ways to increase your company’s efficiency. From optimizing the benefits of the available software to strategic decisions about things like employee compensation and schedules, to some extent, a payroll solution is only as good as the person utilizing it.
Life happens. Over time, your employees will need to update their paperwork. Between new kids, marriages and everything else life will inevitably send your team’s way, it can be difficult to try to account for all of these things as they happen — especially if you have a team that is busy making happen your organization’s goals and mission. Setting regular times to review that paperwork for all employees can help ensure the accuracy of their payroll withholdings and help to make sure that no one is left with any surprises come tax time.
For many small to medium-sized businesses, consulting a payroll professional from the onset is an excellent decision. One of our high school economics teachers used the example of Michael Jordan and his yard. While Michael Jordan is probably more than capable of mowing his lawn himself, the $20 per hour he would pay someone else to do it is a pittance in relation to the $500 per hour he could make working on an endorsement deal. So why on earth would Michael Jordan ever mow his own lawn? The opportunity cost is way too high. Unless your company happens to be a payroll company, your time is probably better spent elsewhere. Getting professional insight from the beginning and as an ongoing resource for your payroll processes ensures that all members of the team can dedicate their time and energy to revenue-generating activities.
And in many cases, outsourcing payroll altogether is a smart financial move for companies of all sizes. Because of a payroll company’s efficiency and the volume of clients they are working for, they are able to offer their expertise at a lower cost than the company would spend to compensate employees for their time to gather information, distribute checks, etc.
Ready to talk to a payroll professional today? Whether you want some quick advice for some DIY solutions or would like to outsource your payroll altogether, our experts are ready to help you make the most of your resources. Contact us today for a consultation!