Regardless of the nature of your small business, setting up an effective employee payroll system is critical. It not only helps you fulfill your responsibilities in a timely manner, but also allows you to boost the efficiency of your operations.
Due to the complexities that are involved with the process, establishing a proper payroll setup can seem like a daunting task. But with some basic knowledge about your options, you can handle it all without straining yourself too much.
To help you make the process as easy as possible, here are 5 payroll setup tips for your small business.
1. Identify Your Payroll Requirements
One of the first steps towards setting up your employee payroll is identifying your payroll needs. This includes exploring various specifics regarding your team size, your regulatory compliance, and your tax requirements.
By looking into factors such as your business structure and your offered benefits, you can assess exactly what type of payroll systems will work well for you. From there, you can start finding a solution that is fit to fulfill your requirements.
This first step towards an effective payroll setup doesn’t take much time but saves you significant efforts in discovering the right solution.
2. Compare Available Software Options
Effective payroll setup is based on the foundation of reliable software. That is why the next tip comes in the form of finding such a solution. To make the process easier, you can explore popular choices and compare solutions such as Paychex vs ADP side by side. Just as you’d carefully consider compare computers to use for your business activities, you want to weigh the pros and cons before making your decision.
While an online comparison provides you with the basics of what you need to know, you can also make notes and discuss them with other members of your management team.
This allows you to make a well-thought-out decision that takes all factors into account, such as the time it takes to set up the system and how much it will cost to get it up and running.
3. Gather Up-to-Date Records
Once you have zeroed-in on the specific solution that you want to use for your small business payroll needs, you should move forward with collecting all necessary details.
This includes your business’ tax information as well as your employees’ records such as direct deposit details. To make sure that you are using the correct data, ensure that the information that you are using is up-to-date.
If you are doubtful about the inaccuracy of any details, you can get your employees to fill out employee registration forms before entering their information into the payroll system.
4. Set Up Time Tracking
To process your payroll correctly, you need a reliable system to track your employees’ time and attendance. With accurate time-tracking information, you can make sure your payroll and benefits structure is correctly applied to each employee based on their hours worked.
Once you have the details available for your specific payroll period, you can put together the respective timesheets to process them through your human resources and accounting divisions.
4. Designate Staff for Payroll Processing
If your small business operates at a very limited scale, then you can process your payroll all by yourself. But if you have a larger staff, then you may want to consider hiring someone for HR and accounting purposes.
But regardless of whoever is processing the payroll, they should make sure to double check details such as timesheets and bank deposit information. Once the payroll for the month is distributed, you should also give employees the opportunity to file discrepancies.
After any available issues have been resolved, you can update and save your employee payroll records for future reference such as tax filing season.
Keeping these suggestions in mind helps you set up your payroll with as few hiccups as possible. As a result, you can stop worrying about how to manage payroll and focus on other important aspects of your business such as expansion and revenue generation.
After relocating from the East Coast, Eliza made a new home in Denver where she received a degree in finance. Her love for mystery thrillers is only outweighed by a desire to pick up a pen and craft her own work. Coupled with her education and years of experience in bookkeeping, Eliza’s niche offers readers useful money-saving tips and creative ways to better manage finances. Her success has landed her work in major publications and has warranted esteemed recognition amongst elite finance bloggers. Growing up in culturally-rich Massachusetts, and spending so much time as a child reveling in Victorian architecture, Eliza developed an interest in interior design at a young age. She continues to pursue this hobby when she’s not writing about tax codes, IRAs, and Real Estate Investment Trusts, and has garnered a massive Pinterest following with her whimsical inspirations.