Payroll problems can be a huge headache in any business. Expenses go up, time gets spent fixing things that should have been done right in the first place, and everyone is unhappy, especially your employees. Payroll problems are easier to avoid than to fix. While many small businesses still do manual payroll, the more efficient route is to invest in payroll software and learn how to use it. But, even with advanced payroll software, there can be problems. Here are a few of those payroll problems and how to solve them.
Your payroll department should have appropriate policies regarding sick time and absence from work. And, you need a system for exact tracking of all related hours both for the short and long term. The first and best policy to institute is that only the employee clocks in and clocks out. This can be best achieved with a punching system for employee cards or even a fingerprint system. A time-tracking app can be great for many work situations.
When employees are absent from work, you need your system to keep track of why they are gone. Depending on your company’s policies, sickness, maternity leave, and simply taking a day off will be treated differently.
As your business grows and you add more employees, you need to make sure that your capacity to do payroll correctly and efficiently keeps up. Many companies just add more employees as the workload increases. However, you will come to a point where an automated system will be more efficient and cost-effective. Going paperless to the extent that is possible is an excellent idea. Encourage employees to use direct deposit. This reduces your costs and is usually popular with workers. And, when you automate payroll and link it to your bookkeeping system, calculations occur automatically and free from human error. Alternatively, you can outsource your payroll to a trusted company that has all of this in place and the expertise needed for all payroll functions. For help dealing with your expanding payroll work, contact us at Exigo Business Solutions for help.
When you mess up on tax compliance, not only are your employees unhappy, you have to deal with the IRS and state tax authorities as well! This one issue is why so many companies outsource their payroll as well as their bookkeeping. This is especially the case when a company has employees in several countries with several sets of tax laws.
When setting up payroll it is the best time to get all of this right. If you are uncertain about any of it, get help. And, even if you do not outsource your payroll, it can be an excellent idea to have an expert examine your system and help you update as needed to avoid compliance problems.
When you use an automated system and direct deposits, a lot of money gets moved without anyone seeing the checks and whom they are going to. You need a system of checks and balances to make sure that everything in your automated system is correct.
This is especially true when fraud is a possibility. Having an outside expert like Exigo Business Solutions audit your books and especially your payroll is a good way to be safe. Contact us if you need help.
Payroll is one of those business functions that are too often set up and then forgotten about. Periodic review of your payroll policies and processes will help you spot inefficiencies and fix them. And, as you add an automated system, you need to make certain that the key people have the training and training updates needed to take full advantage of the system you are paying for!
You also need to look at the size of your workforce doing payroll. With automated systems you will need less manpower and may be able to reassign some of your people to other tasks.
If your payroll department is always working down to the wire to get payroll done on time, you need more employees, more automation, and a closer look at your payroll system. Miss deadlines for issuing paychecks and your employees are unhappy. Miss a deadline with the IRS and you get a fine. Staying ahead and staying organized are the ways to avoid missing deadlines. If this is not happening, you may need to look at who is in charge and make changes or simply outsource your payroll and forget about the headaches!
As your payroll expands and you add more technology, make certain that the relevant people get the relevant training. And, set up a system for updating everyone’s skills on a regular basis. Not only will you find that your payroll department is more efficient but you will also see new, cost-efficient ideas emerging as all of that training pays off. And, what you will not see are more payroll problems when your employees are trained for each task that they do.
Which is the better choice, upgrading payroll operations as your company grows or outsourcing payroll operations to a trusted company? Your answer will lie in the complexity of your payroll operations and your track record in getting the task done on time, efficiently, and without problems like with the IRS or losing money through payroll fraud. There is also the issue of how much time you want to devote to payroll when you could be finding creative ways to bring more money into your business. Payroll is a necessary business operation but one that can and should be delegated or outsourced to someone with the appropriate skills and resources. Contact us at Exigo Business Solutions if you need help deciding if you should outsource your payroll operations.
