Payroll is a core function of any small business and is integral for keeping employees satisfied and engaged. However, like many administrative processes, payroll is rife with complexities that make it challenging for small business owners to manage.
With the right tools and organizational skills, you can improve payroll efficiency within your business. Here are six tips to get you started.
Use a Cloud-Based Payroll System
The modern workforce looks much different than the business landscape of the past. While there was already a shift toward remote and flexible work environments before the pandemic, this unprecedented event exacerbated these changes.
Using a cloud-based payroll system offers several benefits. First and foremost, it allows the user to access data and get the work done from anywhere. If your small business has shifted to a remote work model, you can still pay your people while sitting at your kitchen table during a lockdown.
Another benefit is that cloud-based systems offer better integrations, contributing to a centralized employee management system. Rather than having several systems in silos that can’t share data, you can connect your recruiting and onboarding system with payroll and other useful programs.
Provide Pay Stubs and Records
There’s been a significant shift toward remote work, outsourcing, and hiring freelancers in recent years. The benefit of this strategy is that you can cast a broader net when pulling from the pool of qualified talent and put together a proverbial dream team. Pair this with the shift toward a paperless business environment, and some challenges arise.
Having pay stubs and payment records is necessary for both you and your team in the event of an audit. Furthermore, your employees could require paystubs for various life events, such as applying for loans, purchasing a home, and filing taxes (source: https://www.thepaystubs.com/). Some states even require hard copies of pay stubs to be distributed.
Fortunately, services are available that help you generate pay stubs, even if you don’t use payroll software. Integrating this into your existing payroll process will help you create efficiency by preventing one-off requests and adding them to your to-do list.
Create Consistent Paydays
Another challenge with having remote employees, contractors, and an in-house team is the inconsistency in pay periods. You may have a combination of monthly and bi-weekly employees and contractors that bill as work is completed.
Create consistency by setting scheduled paydays for all. Manage expectations with your contractors regarding payment processing times, and ensure your bi-weekly and monthly payroll efforts fall on the same day. This strategy allows you to complete payroll efforts in batches, helping you stay productive.
Monitor Your Compliance
Staying up to date on regulations, taxation requirements, and other compliance considerations will save you headaches in the long run. Failing to hit deadlines and missing taxation changes could cost you a lot of time and money when the mistake is discovered.
Incorporate regular spot-checks and education opportunities into your quarterly payroll process to stay on top of things.
Empower Your Employees
Mistakes happen when running a small business and juggling responsibilities. Create a culture of empowerment that encourages employees to speak up when they notice an issue or have a question about their pay.
Late payments and errors can cause contention and dissatisfaction among employees. Taking an empathetic, human approach to communication can help smooth things over if these issues arise.
Know When to Outsource
Finally, know when handling payroll in-house is costing you more than outsourcing to a service. Working with a payroll service or accountant ensures that everything meets updated regulatory standards, that everyone gets paid on time, and takes a significant chunk of work off your plate.
With these simple tips, you can create a more efficient payroll process that costs you less, frees up your schedule, and keeps your employees happy.