The payroll process is time-consuming yet a necessary task for your business. Staying on top of your documents, the latest financial legal requirements in your state or country, and maintaining an organized structure for your paperwork can be daunting and just plain frustrating. Knowing how to simplify the payroll process will save precious time so that you can focus on your business, and get back to work!
Here are some tips for a pain-free payroll:
Categorize employees. You need to work out which of your workers are salary and which are hourly before you can go any further in your payroll process. Dependent on which category someone falls into, things like their status for overtime or whether or not it is legal to pay them as a contractor or freelancer when they should be classed as an employee are crucially important both in legal terms as well as in knowing exactly where your money should be going, and how much of it is paid to whom. This classification is also a great method for making the payroll process less complicated for you. By paying your employees regular salaried wages, as opposed to hourly, you can ensure predictability. No more trying to factor in unknowns, which can throw off your budget, like overtime and inaccurate time estimates.
Keep up with legislation. Payroll legislation changes often, so be sure that you keep firmly on top of new laws for your state, county, or country. The taxes and benefits your employees are entitled to are an important part of assessing your payroll. Not only will this knowledge prevent your company from being penalized, but your employees will profit, and happy employees lead to better work outcomes! You don’t need to know every detail of new tax laws, but make sure that you are establishing a firm hold on the news to prevent any fines.
Identify appropriate record-keeping. Which records do you throw away, and when? Which receipts and documents should you keep, and for how long? You don’t want to be subject to an audit and not have the files on hand which you should have kept, but threw out instead. Some federal and state laws require you to hold on to certain documents, so be sure to familiarize yourself with what these are, and keep up with any changes to legislation. So be prepared, and keep your documents for a minimum of four years’ time.
Keep a running profit/loss statement. By retaining a constant profit and loss statement, you can secure a consistent understanding of your monthly profits. An added bonus to this record-keeping is that your bookkeeping will be made easier, as it will be much easier to account for owed taxes and unnecessary expenses. Trim the fat where needed, and save yourself money.
Outsource. Discovering new ways to help your payroll run more seamlessly means fewer costly errors. Consider using online accounting software, where your information will be secure and all in one place. By using cloud-based programs, you can be sure that confidential financial information will be safeguarded, and none of your records will be lost. Choose carefully, to ensure that the program you choose gives you the most assistance for your payroll needs. This way, your focus can go towards more important things–like growing your business!
Operating your payroll means having a lot of patience and organization. By using these tips you can increase efficiency and security, and take some of the load off your shoulders. Using accounting software as a means to offset some of these tasks is a smart way to assure accuracy and coherence.
Time Tracker allows you to do these things, and more and integrates with popular accounting software like QuickBooks and Zero. Take advantage of our free 30-day trial today for accurate time tracking and payroll. No credit card required.