No need to stress with these tips!
You are probably not alone if the day you process payroll is your most stressful time of the week. Whether you are an accountant, small business owner, or human resources professional, managing the payroll process can be challenging. The risk of missing a deadline, miscalculating a value, or forgetting to take a regulatory or tax change into account can throw everything off. You want to make sure employees receive their money on time and ensure the process is as efficient and practical as possible. Payroll can be straightforward, so read on for nine tips to bring some ease to your payroll process.
Have All Employees Classified by Employment Type
Even if you only have ten employees, keeping everyone’s employment classification straight can be difficult. Whether someone is part-time, full-time, freelance, a contractor, or an intern, can impact how you pay them. Having this information at the ready can make the payroll process a lot easier and straightforward.
Consider Getting More Help
Payroll is a pivotal part of the finance process, so it makes sense to have someone dedicated to handling this part of the budgeting system. Consider hiring a part-time associate to enter payroll information, monitor changes in regulations, and disperse payment. While this may be an extra expense, his or her experience can prevent larger budgetary issues down the line.
Invest in a Payroll Management System
Payroll systems can take care of payroll calculations, collect employee information, payroll automation, and the automatic monitoring and inclusion of new employment and tax laws. Implementing a payroll system is a great way to try to minimize human error and let technology take care of some of the routine tasks that come with payroll management.
Make Tracking Time Easy
If you have a lot of hourly workers, it makes sense to have a mechanism for employees to track their time efficiently. Invest in either a robust time tracking system or a project management tool with time tracking features (find some great PM software options here) that track employee time with minimal manual work. Sit down with employees and emphasize the need for employees to use it for the accuracy of their paychecks and find a system that can integrate with your payroll system. A good time tracking tool can prevent someone on staff from having to enter information two times. Also, many disputes can occur when managers and employees disagree about time worked, and a reliable time tracking system can prevent this.
However large or small your payroll team is, you should make it a point to invest in ongoing training and professional development. There are consistent changes in employment regulations that employees who work with payroll should be aware of. Along those lines, there are advancements in techniques and technology that employees can gain exposure to that would benefit their careers as well as the company.
Have a Realistic Timeline for Approval
Payroll employees are not the only part of the staff that should be trained in how to interact with payroll processes. Everyone should be directed in how to work with time entry and calculations to complete the payroll process. Take time to speak with managers about the importance of approving their workers’ time and payment and let them know when you need this information to complete payroll. This will allow them to help you create a more efficient payroll process.
Keep an Eye on Former Employees
To prevent lawsuits or additional trouble, make sure you have a plan in place for paying employees who either quit or were let go. This step requires you to have detailed information on departure dates, and how much these individuals are still owed. A payroll system and a managerial approval process will help you to give employees the rest of the money they are due.
It may be enough to have one person handling payroll when you only have ten employees. However, if this grows to 30 or 50, then you need to think about hiring more people to help you manage the payroll process. Companies should also think about how their tools and processes will scale with a growing team. Not having enough hands can cause delays in payment, overworking, and general mistakes. So, make it a point to grow your payroll team at the same rate your overall employees are increasing. Also, invest in a payroll system or payroll tax software that allows you to add more bells and whistles as you need them.
Combine Pay Cycles
Some owners and human resources professionals attach specific pay cycles to employees based on their employment classification (hourly, salaried, and part-time). However, due to the difficulties in keeping up with all the different employment types and the tendency for mistakes to happen, it makes more sense for the company to keep everyone on the same pay schedule as much as possible. This decreases the amount of work payroll teams must do and lessens the probability for mistakes or delays in processing payment.
The job of processing payroll can be a tedious one. There are so many factors that impact this process. Employee time-off requests, a new tax or employee regulation, overtime, and many other factors can affect how smooth or complicated the process can go. However, the task does not have to be stressful or always come with errors.
There are methods you can establish to prevent mistakes, decrease payment wait times, and encourage all staff to get on the same page about correctly tracking and approving their time. Make hiring the right payroll professional, selecting the correct system, and keeping up-to-date on tax laws a priority, and payroll can become a much more straightforward process.
Chanell Alexander is a writer for TechnologyAdvice. She is a freelance writer and digital marketing strategist. She has over seven years of experience in the nonprofit field, and enjoys blending innovative technology solutions with communications. When she is not writing, Chanell enjoys traveling, contributing to video game blogs, and embracing her inner foodie. See what else Chanell has been up to on her LinkedIn profile and Twitter page.