We remind you a lot in this blog, but that’s because it’s true–payroll is the most important piece of running a successful business. It is an integral part of organizations around the world, in any industry which employs people. Financial stability, ensuring fair wages, and strict compliance to city and state laws are vital to the growth and prosperity of a company. And so you need to know how to avoid any potential pitfalls so that you can avert catastrophe. Payroll issues are the first reason that small businesses fail, and 20% fail just in their first year of operation!
Here are some of the top payroll issues that will negatively impact your business. Don’t worry–we will give you some solutions to these problems–but it is vital that you are aware of these issues and how to fix them if they come up.
Time record errors. Accurately recording time worked by each employee, on each project, is crucial to ensure fair wages and charges to your customers. And when employees are recording their own time, there is a big chance of human error, leading to inaccurate data and potential time theft. These cost your business time and money when trying to rectify, and even if you don’t identify that there has been an error, you will lose money by default if time is not recorded completely.
To avoid these discrepancies in recording time, have each member of your team use tracking software that is easy to use, accurate, and allows for freedom of movement. Many accounting software allow for employees to track their time down to the second, from any of their devices, anywhere they are, at any time of day. There are often also features like an admin dashboard, whereby the time tracked by employees can be checked and approved, or sent back for clarification before being recorded, so that there is no conflict when it comes to appropriate compensation. Having tracked time verified will guard against time theft or too much time spent on projects which could be better managed.
Late payments. You don’t want to chase your customers down when they aren’t paying their bills by deadlines. But you can’t afford to lose the income as you wait, either. Cash flow issues are so detrimental to your business, but there is a worry that the time and energy spent to chase late payments will further hinder your profit. You’ve also spent time cultivating relationships with your customers, and want to instill trust and a sense of reliability so that they keep using your services, or feel confident enough to refer you to their friends and family. Your employees are also important to you, and often when payroll is late due to late or missing payments, their pay is affected.
There is a way to keep everyone happy, and to ensure a higher chance of being paid on time. Time tracking apps often include invoicing features like automated invoice generators with customizable options for branding and the ability to send your invoices in batches. With the implementation of online payment options for your customers, you will find that your clients will be more likely to pay faster than before!
Data security breaches. Confidential information for your business and from your customers needs to have the highest security. If you’re using old-fashioned methods of payroll, like good old paper copies, it is easy for these files to be breached. So, too, are outdated or inefficient online options. And if your filing system is not heavily guarded, sensitive information can easily get into the wrong hands. You are responsible for keeping those records safe from intrusion, and your customers and employees expect this level of service. So how can you ensure the best security for their personal information?
Again, when you outsource to an electronic option, your data transfers will be securely encrypted, as long as you choose your software carefully. Firewall security is standard, and it is important for you to seek a reliable company whose data safeguards are well-known and varied. Look for companies which partner with security specialists, so that you can have the added reassurance that all of your transferred information will be safe and continually monitored against outside breaches.
Invoice Tracker includes each of these solutions to these common payroll issues. Pair the app with Time Tracker to ensure accurate time logs, track your expenses, generate client invoices, and get paid faster. Invoice Tracker’s options for automatic, customizable email reminders will follow up on all your unpaid invoices, so you don’t have to. And with security features including cloud backup, secure 256-bit encryption, and security patching, all GDPR and EU-US privacy shield compliant, you can be safe in the knowledge that your data will be secure.
Try our free Time Tracker, 30-day trial today. See how quickly your payroll issues can be solved. No credit card required, and hassle free!