Payroll is an essential and integral part of business operations. Learning how to structure and manage your payroll effectively will allow you to allocate your budget adequately and attract quality candidates. Best of all, an efficient payroll system will free up your time so you can focus on your business's growth and success.
Payroll is often a tedious task, but using these tips, it can become straightforward and stress-free.
Merge your payroll with your HR system
Payroll is one of the many duties of your HR department. Whether you manage your HR yourself or have a team of professionals, there is a lot of employee data management involved. Keeping documents, files, and records organized is tedious and includes tracking hours, managing benefits deductions, and time off. All this data relates to payroll, and having information stored separately is counterproductive.
On top of that, having to manually input data for records into payroll each week increases the risk of inaccuracy. By investing in payroll Software that integrates with your HR system, you'll have everything in one place, with days off, benefits, and hours worked automatically updating your payroll for you
Strategically choose between hourly pay or salaries
Choosing to pay your employees salaries typically makes payroll a more straightforward process, since their pay is the same amount each pay period. That said, paying a salary doesn't work for all businesses. Most businesses will have at least some employees that would suit an hourly pay rate instead. Paying employees hourly means having to monitor and track hours closely and re-calculate pay every time you do payroll. Payroll software can track everything for you, so you don't have to spend as much time doing calculations. You'll need to consider which type of pay system works best for your business and its employees and choose strategically.
Pick a payroll schedule that makes sense
Beyond just deciding how you want to pay your employees; you need to determine when. There are many ways businesses choose to may payments, including monthly, bi-weekly, weekly, and even bi-monthly. What works you will depend on your type of business and the size of it. The more often you pay your employees, the more times you need to do payroll. Paying employees weekly can become extremely time-consuming if you've got a large business but isn't as big a problem for small businesses. That said, employees may not like to be paid only once every two months, so choose wisely, and according to what your business can stick to.
Compliance is vital when it comes to your payroll. As the business owner, you are accountable for ensuring payroll is provided on time and accurately each pay period. You'll need to understand the labor laws in your state and ensure total compliance or put yourself at risk of legal penalties. You can also face penalties for inaccuracies in payroll, so using a quality payroll software that integrates with your other systems can minimize the risk of errors.