Many business owners view payroll tracking as one of their most stressful administrative tasks. They have good reason to do so. In 2016, businesses accrued $6 billion in employer payroll penalties. That’s up from $4.5 billion in 2014. That’s why it’s more important than ever to get your payroll tracking right.
We’ve compiled five tips for better payroll tracking and management:
1. Offer a Variety of Time Tracking Options
Everyone knows going paperless streamlines time tracking, keeps you organized, and reduces waste. But it’s time to move beyond simply “going electronic”. Today, the most effective time tracking systems allow employees to enter time from any device, from desktop computers and laptops to smartphones and tablets.
Some payroll systems like Gusto even allow time tracking through both apps and paper timesheets, depending on your employees’ preferences. This approach allows their SMB customers to easily transition from old habits into new technology, ensuring another layer of accuracy.
2. Integrate Payroll and HR into One Centralized Location
Being organized is vital for accurate and headache-free payroll. When managing payroll, keep employee records easily accessible. Better yet, use a payroll system that automatically applies employee information so you only need to enter this information once. HR integration can significantly reduce the amount of time needed to perform otherwise lengthy tasks like new employee onboarding, direct deposit set up, and vacation time tracking.
3. Automate Your Taxes
You should automate your taxes whenever it’s possible to do so without losing accuracy. Have your taxes automatically calculated and deducted. Then set up automatic payments to the IRS so there’s no chance of missing quarterly deadlines.
Today, most federal and state tax systems require electronic payments from businesses, so you’ll be one step ahead with compliance. The IRS is constantly updating their requirements and usually releases new tax changes for the upcoming year in December. If you use a payroll software or service, they’ll automatically keep your system up-to-date with any updates.
4. Don’t Forget About the Perks
The perks that your employees look forward to, like vacation days and added benefits, are often a nightmare to calculate with payroll. Employees might enjoy accruing more vacation time, but you need a system that can clearly track and display compounding benefits. Avoid problems down the line by setting up clear company policies and infrastructure capable of managing constantly changing perks.
When organizing your system, you might start with classification. Will you classify days off by specific categories (i.e. sick days, personal days, vacation time) or use a general umbrella term like “paid time off” for all covered absences? There is no single best way to do this; you’ll need to choose the system that works best for your business.
5. Select Payroll Software Suited for Your Business Size
Robust payroll software can manage just about every aspect of payroll for you while allowing manual approvals and updates from your end as needed. Many business owners struggle through payroll, pouring hours into time-consuming tasks when they could be focusing on generating revenue.
Instead, consider payroll software that covers the needs of a business like yours. Business size and payroll complexity will be the most important considerations in your decision. For small businesses, a system like Gusto is often the software of choice, with flexible time entry options and detailed employee insights. For large organizations, ADP provides a more robust software with sophisticated reporting and even multilingual capabilities.
Using software reduces the likelihood of payroll errors and tax penalties while freeing up your time and resources for what’s most important to growing your business. To learn more about payroll options for your business, contact an eBillity expert today.