5 Tips To Make Running Payroll Easier
Payroll is no walk in the park. There are tax laws, labor laws and complex calculations behind every paycheck. What’s worse is that the rules and regulations governing compensation and deductions may change from year to year and will differ from state to state. Sometimes even local municipalities within a state have varying laws that create differences in each one. So, what can business owners do to make this process easier?
1. Get Organized
Because remuneration operates on such strict deadlines, staying organized is extremely important. To accomplish this, a great starting point is creating a calendar. It’s worth adding more than just when the next payday is. Other important dates, such as the end of pay period, should also be included. Companies that use software may have this functionality already built in. If not, Google Calendar is a great alternative.
2. Automate It
Calculating payments and deductions manually is not unheard of, but the more manual the process, the greater the likelihood for error. One area in which businesses may err is tracking employee time. The best way to avoid this is to provide an automated and electronic form of clocking in and clocking out. This could be as simple as the touch of a badge to a card reader, calling a specific operator or logging into a special system on the computer. Special software can also help with deductions, taxes, and payments.
3. Offer Direct Deposit
Not every state allows mandatory direct deposit, but when offered as an option, many employees prefer it. In fact, 82 percent of U.S. workers get their pay electronically via direct deposit. There are many benefits to switching to direct deposit:
- It’s easier to keep track of bank transfers than all the checks handed out.
- Employees appreciate immediate access to their pay.
- Direct deposit is a paperless system.
4. Cloud Storage
The larger the workforce the more space those pay records take up. Professionals often recommend that businesses hang on to payroll records for five years or so, just in case there is an audit or a pending lawsuit related to pay records. The U.S. Equal Employment Opportunity Commission states there is a legal requirement of at least three years. Cloud storage makes it easier to store these files, especially those that are no longer in use.
5. Outsource the Task
Because of the complex nature of pay calculations and the high cost of even the smallest errors, it’s a good idea to leave this business function to specialists. Smaller companies should consider hiring a professional for this role, while larger companies may consider outsourcing the responsibility to a business processing company that specializes in the area.
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