Not only is your payroll one of your greatest business expenses, to cost of doing payroll in money paid out and time spend is significant. Thus, efficient payroll practices are important when setting up small business payroll to do the job right and to control the cost of this operation. Here are some efficient payroll practices that will help you run a tight ship in that regard and keep expenses down.
When your payroll policies are unduly complex, you are increasing the workload of those doing payroll and inviting mistakes to creep into the process. Expense reimbursement, paid time off, complex attendance policies, and the like should be the same for all levels of employment and as clear and concise as possible. Have strict and precise guidelines for how these matters are handled and your payroll will be easier to operate.
To the degree that you can set up employee self-serve methods for payroll, you free up payroll staff for other work. This can be done with a lot of information input by using a properly programmed automatic payroll system.
Converting from paper to digital is one of the keys to success in a modern business. Electronic pay stubs are part of this picture. Electronic pay stubs can be stored in a computer file and are less likely to be lost than paper stubs that may not make it to a filing cabinet folder. And, over the years the employee can access payroll data with a keystroke instead of having to sort through old records.
Encourage your employees to use direct deposit instead of receiving paper checks. You will save money in the process and your employees will love not having to cash their check before having access to payroll funds. For the occasional employee without a bank account, you may wish to consider pay cards that can be replenished automatically and remotely by re-funding the card balance online.
If you have not already done so, set up a payroll calendar that lists pay periods and all important aspects of the payroll cycle such as when you need to hand out W2 and 1099 forms as well as when you need to send money to and report to the IRS and state tax authorities. This will cut down on employee questions when the calendar is prominently posted and distributed and will help keep your staff organized as well.
As your business grows, you add more employees, and payroll seems to be taking up more and more time, consider outsourcing your payroll. This allows you to focus on the core parts of your business and not on what is really a sideshow albeit a very important one. As tax rules, reporting requirements, and other complexities continue to change, using a payroll professional lets you get the job done right and one time without the hassle of doing it in house.
For help with developing efficient payroll practices and sound advice about outsourcing your payroll activities, contact Exigo Business Solutions today.
