A major reason why your employees work hard and persevere is to get paid on time and the amount they rightfully deserve. So, it’s crucial to manage payroll effectively and efficiently to avoid disappointing your employees, which could significantly impact your business.
So, how do you manage the payroll of your employees? Learn how to manage your employees’ pays by reading below.
Implement An Automated Payroll Process
Automating your payroll process will make things a lot easier for you, as well as help you avoid missed checks, which can demoralize your employees. An automated payroll system can document everything, not missing a single information that can be integrated with your employee time tracking software.
Here are the advantages of automating the payroll process:
- Provides Employee Access: When employees are able to access their time and pay records, it eliminates doubts and provides a clear explanation as to how they are getting paid. With an automated payroll system, your employees can check their paid logged hours.
- Helps You Focus On Other Important Matters: You can rely on automated payroll software and focus on other important business matters, such as sales and marketing for your business.
- Inspires Employees: Integrating employee scheduling and payroll system is a great investment as it ensures that your employees are paid in a timely manner. In return, it will inspire your staff to trust and rely on their set schedules, treating your business like it is their own.
Stay Compliant With Tax And Payroll Laws
Employers should comply with state and federal labor laws for them to provide payroll accurately. As you hire more employees with various benefits and classifications, employee payroll related to law compliance becomes more challenging.
You can reduce the risk of costly legal penalties using all-in-one HR and payroll software. Such software helps with labor law compliance and easy management of regular pay and paid time off.
Check these important tips to ensure tax and payroll compliance:
- Direct Transfer: Setting up the direct transfer of payroll tax payments from your bank account to a government account will avoid delaying tax payments and penalties.
- Categorizing Employees: Payroll preparation involves classifying workers correctly. Incorrectly classifying employees is a common mistake with major tax implications. Remember, tax penalties could have a serious impact on your business. If you’re unsure how to classify your employees, make sure to fill in RS Form SS-8, which is the Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax. Send this form to the IRS to determine the correct employee categories.
Determine How Employees Will Be Paid
Employee salaries should be easy to manage. Pay periods can be weekly or bi-weekly, and some do it monthly. That’s why you have to determine the best payment method and whether you’ll be paying your employees per hour or on a daily basis. Whatever payroll method you choose, make sure to have a system to keep track of employee time and compensation.
Check Your Accounts Payable And Receivable
Poor cash flow management can affect your payroll process. It’s important to know the amount of money that comes in and out of your business by regularly checking your accounts payable and understanding the terms. This way, you can extend the terms and pay the late fee for a less harmful effect, as well as to avoid missing payroll. Make sure to collect payments on time and never overextend credit.
Conduct Payroll Audits
It’s vital to conduct regular, ongoing audits to address employee payroll complaints. Resolve payroll issues using a flowcharting tool or detailed workflow analysis so that you can list the steps from start to finish. It helps spot redundancies and other payroll problems.
Here are the benefits of conducting payroll audits:
- By intentionally identifying and documenting payroll process flaws, you can determine the additions, corrections, and changes needed to ensure an efficient, more cost-effective, and accurate payroll management process. This way, you can create better payroll management strategies.
- With payroll audits, you can improve your process better. Remember that using an automated system doesn’t completely eliminate the need for conducting regular audits. You still need to manually classify employees, adjust pay rates, and foresee tax info and benefit items.
Managing your employees’ pays can be challenging without the right knowledge, skills, and tools to help you. Compliance with payroll and tax laws is also important to avoid penalties and delays in payroll processing. That’s why investing in reliable payroll software and integrating it with your employee scheduling and time tracking, as well as accounting software, could save you money, time, and effort.