Being able to manage your business’s payroll correctly is an important skill for any business owner. Typically, business owners will need to spend some time, effort and perhaps even money when it comes to learning and mastering this skill. Most people don’t go into starting their own business as payroll experts, but this aspect of running a business will become essential as soon as you hire your first employee. And, it’s important since even the smallest of payroll mistakes could have serious consequences for your business and its employees. Even when these are manageable, such as an employee being underpaid and the mistake corrected straight away, it can have a negative impact on the relationship between your business and your team. Payroll management isn’t always easy, and it’s not uncommon for business owners to underestimate how much work it is going to take. So, here are some key tips to keep in mind when it comes to managing payroll as a business owner.
Outsource Wherever You Can
Today, there are more and more businesses available that provide a range of services to businesses of all sizes – including payroll and human resources. There is no need for you to take on the job of doing payroll on your own unless you really want to. Outsourcing payroll services for small business is often a preferred option since it means that, as a business owner, your time can be freed up to spend elsewhere. In addition, outsourcing payroll and HR will help your business avoid mistakes and make sure that employees are paid correctly and on time. When you outsource to a company that provides both payroll and HR services, you may also be able to take advantage of other benefits including better hiring processes, more employee benefits to offer, and more.
Decide How You Will Pay Employees
Most businesses have the option of paying their employees either a salary or an hourly rate. Salaried employees can often lead to payrolls that are easier to manage since employees will typically be paid the same amount each month for the work that they do. On the other hand, if paying an hourly rate to your employees makes more sense for your business, then it’s important to determine how you are going to make sure that the hours each employee works match up with the money that they are paid each week or month. It’s important to figure out how you are going to keep track of hours worked – and, bear in mind that this might sometimes differ from the hours that are on the schedule, for example, if an employee works overtime or if two employees swap shifts. Clocking in machines and software that integrate with any payroll software you or your payroll company are using can be an ideal solution to make this easier to manage.
Use Reputable Payroll Software
If you want to tackle payroll on your own, the easiest way to do this is by using a reputable payroll software program. Whether you decide to hire somebody to look after the payroll in your business or prefer the idea of saving money to do it on your own, there are several payroll software program options that you might want to consider for making things easier to manage. Businesses of all sizes can find suitable web or app-based payroll software solutions that work well in any industry. These automated systems can be used to run payrolls, freeing up more time to focus on the more important aspects of your business by reducing the number of manual tasks that are required.
Integrate Payroll with Accounting and Scheduling
If your employees are mostly paid by the hour, it’s important to make sure that your payroll is accurate and timely to ensure that everybody is paid on time and the right amount. You can make this easier for both yourself and your employees by integrating your payroll with other systems in the business including scheduling and accounting. This will make it easier to accurately manage your payroll, automate calculating how much employees are owed for the hours that they work, and make it easier for an off-site, outsourced payroll company if you decide to use one.
Stay Up to Date
It’s important to be aware that some changes to legislation, regulations, and even laws might have an effect on how you need to run payroll in your business. If you outsource to an HR and payroll company, they will likely keep up to date with all the latest relevant information on your behalf. However, if you are going to be managing payroll on your own, it’s important to spend some time making sure that you are aware of the latest developments and any changes that need to be put in place. This will also help you plan for the future and get professional support and advice for any upcoming changes that are confusing or you are unsure about.
Clear Payroll Policies
Whether you are planning to manage your own payroll or are considering outsourcing this work to a professional or company, it’s a good idea to put a clear payroll policy in place. You can then ask any employees to review and agree to this policy when they start working for your company. The payroll policy might include information such as how and when employees will be paid along with anything else that will need to be considered such as sick pay, holiday pay, commission, and reimbursement of any expenses that employees might incur when they are on the job. Making sure that this policy is available and easy to access will help you ensure that everybody who works for your company has a clear understanding of how the payroll process works and what to expect.
As a business owner, managing payroll can be one of the most complex things that you will need to do as part of running your company. Whether you are just starting out or are planning to hire your first employee soon, it’s good to have a payroll plan in place.