Payroll processing is a vital component of any business. However, many issues can arise – especially if you are trying to handle the task on your own.
When you own a business, you know cash can be tight. While this is a fact you have to live with, it is still necessary to pay your workers on time, according to the Fair Labor Standards Act (FLSA).
If you are searching for ways to make payroll processing easier, keep reading. The tips found below will help ensure your employees are paid on time, and the task of handling payroll processing is not as stressful.
Maintain Accurate Records
To ensure you are paying your employees on time and the amount they are due, you must maintain accurate records. This includes time records of when each employee worked and who is entitled to overtime and how much.
Sometimes, utilizing services like Paypro to take over payroll processing for your company is beneficial. This can help ensure your employees receive their pay on time and that your records remain accurate and up to date.
Create a Payroll Budget
Another important step when handling payroll processing is setting your budget properly. The payroll budget needs to include funds for wages and taxes.
To create this budget, look at your annual and monthly sales volume, your staff’s size, and your estimated profit margins. The details may vary based on the industry you work in.
As part of your payroll budget, there are several details you should consider.
For example, how are your employees categorized? Do you pay them as independent workers or as W2 workers? This is going to impact what is withheld from their check – if anything.
This is another time a third-party payroll service can be invaluable. They can keep up with all this information for you and ensure your employees receive the money they are entitled to.
Develop a Payroll Schedule
Another important component of payroll planning is creating a schedule.
The most common time periods to pay your workers include monthly, semi-month, biweekly, and weekly.
Keep in mind, the more often you are paying your employees, the more time you spend processing payroll, the more payroll costs you incur, and the likelihood of payroll errors goes up.
Therefore, many companies choose to pay workers monthly.
Read also: Tax Tips for Businesses & Contractors: 8 Things to Know About Form 1099
Check Everything before Submitting Payroll
If you have paid hourly employees, you should make sure to double-check their timecards when you enter information into the payroll system you use or provide it to your third-party payroll company.
Mistakes may wind up costing you money. Checking everything ensures everyone is paid correctly.
As you can see, when you use the tips and tricks mentioned here, you can simplify the entire payroll process for your business.
While payroll processing can be complicated, it is a necessary part of business ownership. If possible, try to hire a third-party service to take over the payroll processing for your company. This is going to offer the biggest benefits for you and your company.