Payroll management can be a challenge, especially if you have a medium to large-sized business and find yourself having to juggle the contracts of multiple employees.
Not only do you need to keep track of factors such as tax bands, commission rates, working hours, and contract variations, you also need to ensure that all of this is done on time so paychecks are not late. Moreover, improper payroll management can result in fines, legal penalties, and even significant employee turnover.
However, this doesn’t mean that managing your payroll always has to be a struggle. If you’re wondering how to manage it so that you can keep track of payroll better and manage the details faster and more effectively, take a look at this guide.
If payroll data is scattered all over the place, you will find yourself spending significant amounts of time simply gathering the necessary information. Instead, if you keep all the documentation organized, you will find it easier to meet the deadlines.
Additionally, organization means that you are far less likely to miss important dates. This includes, most importantly, payday for employees. If your employees are paid on different days of the month depending on their position, you could also consider creating a payroll calendar so you know when each person should be paid.
Calendars also help you keep track of tax payments and paperwork so that no detail is ever overlooked. They also serve as a visual reminder of the tasks you still have to complete, so you can plan your schedule to ensure that they are completed on time.
Use Payroll Software
Several companies, especially those with fewer employees, believe it is more effective to handle payroll purely through paper documentation. While doing so is certainly possible, it significantly requires more time and effort from your side.
Instead, investing in payroll software is always a better option. You can quickly find an easy-to-use payroll software to meet your business’s needs; there are several options available on the market. Using this type of software will allow you to guarantee accurate calculation of each employee’s pay, automate tax calculations, and more.
Additionally, payroll software means that you are less susceptible to human errors, have support for any wage garnishments you may need to include, can pay third-party contractors easily and quickly, and can track salary changes for your employees. Many providers also offer software that integrates both payroll and HR features, so both the HR and payroll teams will be notified of any changes and all records will be updated at the same time.
Automate Your T&A System
If you have hourly employees, it’s important to consider shifting to an automated time and attendance system. Paper-based tracking can result in a significant amount of documents that you will need to keep track of, increasing the risk of mistakes when it comes to payroll.
Additionally, automated T&A systems allow you to calculate the time worked far more efficiently. Time theft is widespread among hourly workers – indeed, about 43% of people surveyed in one study admitted to exaggerating the number of hours they worked. This can result in significant financial losses to businesses, as they will be paying out payroll based on erroneous timesheets.
Automated systems, on the other hand, significantly reduce fraudulent submissions and errors when employees record their hours. Calculations are handled automatically, so employees cannot note their own hours. The automated system means that time theft is no longer possible and timesheet management becomes significantly easier for your payroll staff.
Hire a Dedicated Payroll Staff
Many businesses combine payroll duties into other departments, such as the HR department. However, those staff members have several other responsibilities to focus on, which means that they have a limited amount of time and attention to give, working on payroll.
Distractions when managing payroll can result in numerous errors. This, in turn, can result in costly penalties for your business. Additionally, delayed paychecks lead to employee dissatisfaction and increase turnover, making it difficult for you to hire and retain experienced staff.
To reduce the risk of this happening, it’s essential to hire a dedicated payroll staff. Members of your payroll team will be able to focus their attention purely on this part of the business and will gladly double-check their work to ensure that no errors are made. Additionally, it ensures that your payroll staff is more satisfied with their jobs, as they don’t have to focus on multiple separate tasks.
Consider Outsourcing Services
Not all businesses can handle payroll management in-house. This may be due to not having enough staff, being unable to keep track of changing government rules and regulations, and other reasons.
No matter the reason, if your business finds itself struggling to manage payroll efficiently, outsourcing this task to dedicated payroll management companies can help. Not only do these businesses have access to the latest software, but they also employ professionals dedicated to understanding evolving payroll laws and regulations.
Payroll management services can help you significantly reduce costs while also ensuring that work is completed on time. Additionally, outsourcing payroll can actually help you improve your data security by reducing the risk of embezzlement, identity theft, server breaches, and more.
If there are delays in releasing payroll, you must be as transparent as possible with your employees. Make sure they know that you are working on rectifying the situation, and give them access to all relevant information about their pay.
This can include creating a list of FAQs, including clarifications in the employee handbook, and helping them understand how the payroll process works. This reassures them that they will not be out of money and that you understand their concerns.
Managing your payroll effectively is a vital part of boosting employee morale and helps you grow a stronger brand. Aside from impacting your workforce, payroll issues can create a negative reputation about your business in clients’ minds. While handling payroll may seem like a challenge, having a clear plan in place will ensure that things move smoothly, and you don’t have to worry about issues recurring each month.