Businesses across the globe are becoming more and more employee-centric. Unlike previous times, they are more sensitive towards the needs of their employees, as they believe employee satisfaction is their biggest strength and is an asset for the growth of their organization. Payroll for businesses is an important process for any organization, and outsourcing payroll to a payroll service provider is a pre-dominant step in this aspect.
Businesses have realized that in-house payroll activities consume a great amount of critical time and focus on “need of the hour” activities. A leading third-party employee service provider and payroll management specialists combine a highly skilled team, who use advanced technology to ensure flawless payroll processing for your company. For new businesses, payroll’s scope can be surprising. But even well-established companies can benefit from a refresher course to make sure nothing slips through the cracks.
Making mistakes when running payroll can be costly not only to your employees but to your business too – both financially and reputational. Such mistakes might include overpaying or underpaying taxes, paying employees late or incorrectly, making incorrect pension contributions and much more. Not only do you risk incurring penalties or interest charges from HMRC, but you risk the morale and trust of your employees. Outsourcing payroll to a payroll service provider can give you time to focus on your business and help you organize, analyze and add clarity to your core business.
Effective payroll administration can prove catalytic in transforming your business. If you do not have the resources to manage your payroll in-house, outsourcing it to an experienced payroll services provider can prove extremely beneficial.
According to the National Business Association 2013 Small Business Taxation Survey, 60 percent of small businesses handle their payroll processes internally. Regardless of the size of your business, it’s important to have an organized payroll system in place to protect you from IRS penalties and to ensure your employees are paid on time.
Processing payroll can be one of the biggest sources of frustration, but it is unequivocally one of the most important parts of your business.
Tips and tricks for managing payroll effectively
The following tips and tricks can help efficiently manage payroll while minimizing the risk of costly errors-
1. Determine your payroll type
Most of the times, putting employees on salaries is easier to manage because they take the stress out of determining how much your employees are paid each month and keeps everything consistent.
However, if you have hourly employees, make sure you have a system in place for how you keep track of time and compensation.
2. Set a payroll budget
It’s important to clearly understand what impact payroll expenses will have on your company’s financials. Payroll is a major expense, often higher than employers anticipate. Sometimes unplanned expenses on payroll can turn out to be expensive for an organization, which could eventually lead to a loss in the overall revenue. A payroll service provider can help you pre-plan your budget so that the expenses don’t exceed the limit and losses can be avoided.
3. Pick the software that works for your business
When choosing payroll software for your company, try to select an option that’s hosted on the cloud. This will make it easier to access all of your payroll information in one place, whenever you need it.
In addition to finding payroll software, invest in a management program that takes the stress out of payroll for you.
4. Classifying your employees
Classify your workers. Whether you hire full-time employees, independent contractors, or interns, if the person is working for your company, they typically should be classified as an employee.
5. Creating a concise payroll schedule
Setting a payroll schedule that works with your business’s cash flow needs can help prevent cash flow crunches, but it’s also important to make sure you comply with all federal and state laws, because payroll schedule requirements can vary.
6. Keep simple policies
Establish clear guidelines, as to how and when employees will be paid, plus any additional considerations, such as how expense reimbursements work and rules around benefits eligibility and paid time-off. Create and maintain a clear, concise payroll policy document, and update it when necessary. Be sure all payroll policies are easily accessible and understood.
7. Keep in check with federal and state compliance laws
Choose a payroll software that automatically takes care of state and federal taxes for you. This can help with timely payroll tax deposits and ensure the process is completed on time.
8. Automate the payroll process
A payroll service provider can automate your payroll process enabling you to track your employee’s time and performance and reward them for the same. It keeps the employees in touch with the company policies and reduce the redundant time-consuming process of calculating the employees’ salary.
By following these tips, you’ll be able to streamline your payroll process and boost your business’s productivity.
Managing payroll requires patience, organization, and communication across your entire organization and it’s a viable option for businesses to outsource their payroll management to a third-party payroll service provider.