Payroll management is something that is both basic and complex at the same time. But it’s something that every employer has to deal with – so it’s vitally important to get it right. The trouble is, many first-time business owners have no idea how to manage employee payrolls.
Furthermore, just because every employer does it doesn’t mean that mistakes never happen. With that in mind, here is a brief summary of payroll basics, including some common blunders, and tips on how to streamline the process for you and your employees:
Payroll Basics
- The first thing you need to do is set a payment schedule; make sure you have time carved out every week to get your employees their paychecks on time. Direct deposit can simplify the process, but you need to be on the ball with their payment totals, minus tax withholdings, ready to draft from your bank
- Pay your employees’ tax withholdings along with all the taxes you owe on your own, as a business.
- Make sure you file your business taxes according to all applicable laws. You may need to do this annually or quarterly, but do it you must.
Common Payroll Blunders
- There are plenty of numbers and totals to transpose or even drop — so keep it simple with good payroll software. And when you do make an error, make sure to correct it quickly.
- Lots of business owners miss their tax deadlines. Another great thing about automated software options is that they send you reminders when tax time rolls around.
- Payroll apps handle penalties whenever a deadline is missed. They also make it easier to keep oversights from happening in the first place.
What is the Best Payroll System For Your Business?
- Pen and Paper. This old-school method offers the most hands-on control, but also the potential for big mistakes. If you find yourself continually slipping up with manual bookkeeping, you’ll probably be better off going with a more modern approach.
- Software. Most bookkeeping, accounting, and tax software makes your life a lot easier. The control still stays with you. You decide how the application functions, but most of the grunt work is automated.
- A real live accountant. Accountants can be pricey, but they may be the best option for businesses with complex finances. Of course, you have less control with this option, but you’re also less accountable for any mistakes.
- Payroll vendor. This is a full-service offering. You won’t have much input; it’s also expensive. The good news is you don’t have to worry about error accountability, and you can be sure the money will always end up where you intend it.
Yes, payroll management is somewhat scary on first glance. But there are many ways to make it work, for every kind of business. By assessing your daily operations and the options available to you, you should be able to find a system that works best for you — and your employees.
Photo Credit: fAil
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