Are you looking for a way to take control of your financial destiny? If so, one of the best ways to do this is by starting a business of your own.
The number of small businesses in American has grown nearly 50 percent since 1982. When first starting out, you will have to work hard to avoid mistakes. A steady stream of startup mistakes can lead to you closing your doors in a relatively short amount of time.
Some of the most common startup mistakes involve human resources and payroll. Doing things like investing in a quality timecard calculator and scheduling software can help you keep your payroll on track.
Read below to find out more about common payroll and human resources mistakes made by inexperienced business owners.
Mixing Personal and Business Finances Can Be Disastrous
One of the biggest misconceptions startup business owners have is that opening a business bank account is pointless. New companies will not usually start off making money, which is why a business owner may have this type of attitude towards a separate bank account. However, as a business grows, it will start to generate a lot of revenue.
Mixing your personal and business finances will usually end in disaster. If you are ever audited by the IRS, it will be very hard for you to separate the various transactions in the account. Rather than having to deal with this headache, you need to open up a business account quickly.
Avoid Misclassifying Your Employees
Some business owners think that they can label all of their employees as independent contractors in an attempt to make taxes easier each year. The truth is that many business owners misclassify their workers and it ends up costing them a lot of money as a result.
Most business owners want to classify employees as independent contractors because they think it exempts them from offering these individuals benefits. The IRS penalty for misclassifying employees can be as much as $15,000. If you are unsure about what an employee’s status should be, you need to consult with a business tax attorney. These legal professionals will have no problem offering you the guidance needed to make the right decision.
Don’t Overpay For Employee Benefits and Healthcare
Attracting high-quality talent is something you should be passionate about as a business owner. One of the best ways to entice prospective employees is by offering a great benefits package. When coming up with your benefits package, you need to take some time to do a great deal of research.
Shopping around with the various healthcare insurance providers in your area is a great idea. By doing this you can avoid paying too much for benefits that are simply not worth it. While you may have to devote a lot of time and energy to this research, it will definitely pay off in the long run.
Using Outdated Human Resources Tools is a Bad Idea
When trying to onboard a new employee, you need to be mindful of just how effective this process is. If you are using outdated human resources tools and software, then chances are your new employees are going to be bombarded with paperwork. Your main focus needs to be on how to properly update your human resources tools to better serve your new employees.
In some instances, outsourcing all HR and payroll functions may be a good idea. By doing this, you can focus more on expanding your business into new markets.