Does payroll drive you crazy? Payroll processing can be a time-consuming process. And if you are like most small businesses and have been handling payroll processing internally, you likely know that better than anyone. In addition to creating a more time efficient process so that you can get back to making money for your company, you need to be sure that your payroll processing is accurate and complies with all applicable laws so that your employees are paid correctly and on time, and so that your business is not vulnerable to any legal action. Unless your small business is an accounting company, it is likely that you are not entirely familiar with payroll processing and an even better chance that it is not a chore that you enjoy doing. In this article, we have gathered some of our favorite payroll tips so that you can confidently execute payroll processing with minimal time and hassle.
Payroll Processing Tips
Keep a separate bank account
You can save yourself hours of headaches and work by maintaining a bank account that is used exclusively for payroll. In doing so, you will ensure that the money you have budgeted for payroll and payroll taxes does not become entwined in general business funds.
Pay the feds, too!
Whenever you complete payroll processing and issue paychecks to employees, go ahead and make a federal tax deposit at the same time. Similar to the reasoning behind keeping a separate bank account for payroll processing, making these regular tax payments will ensure that you are not surprised by a large tax bill or penalties for paying federal taxes too late. It will also remove the temptation to use those funds on another business expense and to pay yourself back later.
Hourly or salaried? And how often?
Are your employees currently paid on an hourly basis or are they salaried? Whichever answer, you may want to consider if making a change is in order. Salaried employees make for easier payroll processing because their pay is consistent. If you operate a business that makes monthly salaries impractical, assess how employees clock in and clock out. Tracking their time and compensation can be much simpler and accurate with the introduction of new software. Usually, the question of whether to pay your employees hourly or with a salary will come down to the nature of their work and how often they end up working more than 40 hours a week.
Along those same lines, assess how often you are doing payroll processing. Would it be feasible to reduce the number of times payroll is processed? For example, rather than paying employees on a weekly basis, switching to every other week or the first and the 15th can help streamline the process. Though you will potentially have more information to gather for payroll processing by extending your pay period, overall you will save time by only having to do it once or twice every month.
As always, contact us for a free consultation if you would like to discuss your business in particular and if a tweak to the way you pay your employees or how often you do payroll processing would impact your company.
Take advantage of online calculators
You do not have to be a payroll processing wizard to make fairly accurate estimates about payroll and to accurately fill out forms like the W-4. Use PayTech’s inventory of free online payroll calculators, They can help you calculate bonuses, hourly pay rates, check your W-4 forms for accuracy and more!
These calculators can be invaluable when you are assessing what is in store for your business and to make the determinations outlined in the payroll tips above regarding pay rates and frequency.
Outsource your payroll
No matter how great your attention to detail, almost without exception, your time as a business owner is better spent on more profitable activities. And there will always be certain instances when something needs to be done and it is either not possible or not prudent to have anyone else within your company take care of it. But a business emergency does not eliminate the need for timely payroll processing. By outsourcing your payroll processing to a reputable company that specializes in it, you can rest assured that your business and employees are being taken care of, that your payroll processing complies with all legal requirements and that you will have time to tackle whatever else business has to throw at you.
Additionally, a good payroll company will be abreast of the latest tech trends and be able to help your business stay at the forefront and take full advantage of said technologies to continually improve your payroll processing.
Whether you have questions about doing payroll processing internally and would like some personalized payroll tips, or you would like to explore outsourcing payroll, do not hesitate to contact us. We are giant nerds, meaning that payroll is one of our passions! We’ll be happy to chat. 🙂