Payroll can make or break your business. It sounds simple, right? Give your employees and independent contractors the money they’re owed and keep a record of it to pass along to the government during tax season. Payroll can and should be simple, but too often, it isn’t. This is because the process has gotten more and more complex over the years and now involves several detailed hoops you need to jump through if you’re going to meet employee expectations and also have a happy and calm tax season. The following will explore several payroll management tips that can help you get your payroll process running smoothly and efficiently.
Of course, every industry is different. This means it is completely possible that you might need some highly specialized tips for your business’s payroll. If this is the case, reach out to a payroll services provider or a payroll software provider and ask about what options exist for your business, given the context. There will be solutions for your specific problems if you start to look. Never settle for a frustrating experience when you haven’t done all the research possible on finding a better way to get things done.
Get One High-Quality Software
Payroll is a complex system of interlinked processes. If a system has developed slowly over time, you might find that there are actually several different places you’re storing information and different programs you’re using for calculations. If you want to have a headache-free payroll process, everything needs to be in one place. This information is inherently connected, and this means that if it’s all together in a single program, like with Zenefits.com, for example, everyone’s life just got easier. Not only will everything be together come tax season, but you and your payroll team can also search through the data and look at it all combined. This can help you become aware of areas where improvements can be made or spending doesn’t make sense in regards to profits. It could end up saving you a ton of money.
Using a single program is also helpful for simplifying how you calculate payroll deduction amounts. Having all of the data in one place makes it easy to run reports and make sure everything is accurate and up-to-date before you start processing employee paychecks.
Find A System That Is Scalable
If your company has the possibility of growing in the future (which all businesses do), then you need to keep in mind the scalability of your payroll program. Whenever you’re adopting new technology, software, staff, or processes, it is crucial that you ask yourself whether these additions will still be functional if the company were to grow. If the answer is no, find an alternative that will be. Nothing slows down efficiency like having to switch software or processes after everyone’s gotten used to them. If you find software or develop procedures that allow for growth, you’re going to have to tear down and rebuild less frequently.
Stay Up To Date On The Laws
Laws change over time, and this means you need to be aware of them if you want to stay on the right side of them. When paying employees, there are many legal requirements you need to comply with. It is in your best interest to keep yourself updated on what these legal requirements are and to subscribe to a source of information that will present you with changes like a newsletter specifically covering payroll.
Read Your Own Records
The common advice is to keep good records, and this is a very solid foundation, but it’s missing one crucial component: the reviewing of these records. What good is all this data if you don’t use it to learn and grow and improve your business? You should be regularly auditing your revenue, expenses, payroll, overhead costs, cost of goods sold, assets, equity, and liabilities. Ideally, you’re comparing the data to years passed as well. On August 25th this year, did you make more or less than August 25th last year? Why? What can be learned from this? You should be looking for expenses that don’t pull their own weight in terms of revenue or growth. You should be examining those days where revenue grew and dissecting all the things that could have affected it, and running experiments to see if you can replicate that growth. Once you see how invaluable payroll information can be, you’ll be eager to collect in and work with it, and since people do better work when they’re eager, the payroll process will be improved.
The above tips should help you smooth out your payroll processes and ensure that the procedures you have in place are doing everything they can to support your business. Payroll can be a goldmine of critical information that can help propel your business’s growth.