The payroll process can be challenging for any company, and it’s easy to get bogged down in the administrative side of things. Every business owner knows how important it is to make sure that they’re paying employees correctly and on time. But with so many different regulations, paperwork requirements, and tax implications, it’s no wonder why the payroll process can become such a pain.
Staying on top of these regulations and changes can mean a lot of extra work for the payroll team. The key to ensuring a streamlined payroll process for your business or company is to improve efficiency at every level. Here are eight ways to ensure your payroll is working in the best way for your business needs.
1. Control your costs
Payroll is one of the most expensive aspects of running a business. It can be tough to control these costs while ensuring employees’ paychecks are always paid on time, but there are plenty of ways you can reduce what you’re spending on payroll processing. Business owners who manage their payroll more efficiently often see significant savings over time. As a starting point, analyze costs per employee and department to help identify areas where costs are not being shared equally.
Maintain an accurate spreadsheet of all payroll expenses, including benefits and bonuses for each employee, to determine what you’re spending on every hour worked. Use the data collected in your cost analysis to create a plan that will help keep future payroll processing fees under control while maintaining productivity levels among employees working to meet deadlines. Also, know what you’re paying for in your payroll processing system and how much it costs per transaction.
Opt for the best payroll software with transparent fees so that you understand exactly what each dollar is going towards. If there are any hidden or unclear charges on your invoices, contact your provider right away because it could be a sign of an inexperienced or dishonest payroll service. Ensure you understand the cost structure before signing any contract and ask for clarification if necessary to ensure there won’t be any surprise bills later on.
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2. Streamlining the process of getting data
Making sure everyone has access to all of their data makes it easier for them to take action and make changes. If you’re using spreadsheets, consider making a master copy that is shared with your team. That way, they can add new information and edit existing data without updating multiple files or sending emails back and forth. Create a schedule for handling payroll activities to ensure that your team follows the same process every time they need to update data or make changes.
For example, create standard operating procedures (SOPs) for how frequently you review files with employees, perform audits on pay rates, etc., so everyone knows their responsibilities at each step in the process. Opt for an automated data collection option to streamline your payroll and avoid mistakes that can happen with manual processing or spreadsheets. With the correct payroll data, you can track and update things like time worked, pay rates based on job titles or experience levels, raises for employees who have been with your company a long time, etc.
3. Find out what other departments actually need
One of the biggest mistakes companies makes when they try to streamline their payroll process is that they don’t consult with other departments, especially accounting. If your business departments don’t have access to what they need at any point in time, you can never expect your payroll process to go off without a hitch. Find out what other departments actually need, and make it a point to get them the information they need promptly.
For instance, if you have a simple business model where your accounts department only needs to know the total number of hours each employee has worked, there’s no need to create an accounting journal entry. However, if there are certain entries related to payroll which need to be made in order for your company’s financial statements and taxes to be filed correctly, make sure these are made in accounting. By providing each department with the information they need, you can streamline your payroll process.
4. Manage automatic payroll enrollment more efficiently
Enrolling employees in payroll is critical to ensure that their paychecks are delivered on time and at the right amount. However, when employers have a large number of employees to enroll in payroll, it can take several hours to complete this task. This inefficient use of valuable company resources poses a big risk for human error with so many different people involved. Employers should instead automate the enrollment process.
Consider integrating this into an automated onboarding solution that can also enroll new employees in HR and other company services, such as benefits or payroll taxes. You should also enable automatic adjustments when an employee’s status changes, such as when they’re promoted or move between departments. Automating enrollment in payroll is a big step towards streamlining the entire process and making your paydays go more smoothly without any additional technology.
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5. Embrace new business technologies
Another effective way to streamline your payroll process is by embracing new business technologies. This way, you can automate many tasks and make it easier for employees and department heads to handle multiple projects at once. You can do so by using online systems that allow you to collect data quickly while also automating payment processes such as reporting and invoicing.
Consider some of these options:
- Automate your timekeeping with a time recording app or have devices preloaded with employee timesheets that they can access on their own. A solution like this doesn’t require you to manually calculate hours worked and timestamps, making it a simple process.
- Invest in that can help create invoices and send them out electronically, reducing time spent on administrative tasks such as billing clients or issuing payroll.
- Let employees manage their own time off requests and expense reports using an online collaborative platform. This way, they can submit requests when necessary and track expenses in real-time.
- Use automated notifications to keep everyone in the loop when it comes to making changes, submitting leave requests, or checking up on expenses.
When investing in business technology, ensure you’re getting the most out of it by training employees on using each tool. Doing so ensures that everyone is using these systems to maximize benefits and minimize time spent inputting data or investigating issues.
6. Stay on top of new legislation changes
You should also understand the impact of new legislation on your business and how it affects payroll. Ensure you’re aware of upcoming changes to ensure you don’t fall behind as soon as they become effective. Federal and state laws typically provide a window of time for businesses to come into compliance with changes. However, you want to take action as soon as possible. You don’t want to find yourself playing catch-up when the deadline hits.
Ensure all new changes are being implemented in a timely manner. Keep in mind that part of ensuring a streamlined payroll process involves staying compliant with legislation. Any disruption to your existing processes due to a lack of compliance can easily derail your entire payroll process and potentially even put you at risk of getting audited. In addition, it’s important that all employees are updated on changes too. This is especially true if there have been any changes to their pay rate or deductions within the new legislation.
7. Integrate payroll with other business functions
Another way to streamline your payroll process is by integrating it with other business functions. You can do this by using a software or service that has enhanced integrations such as Xero, FreshBooks, and more. Most popular accounting software solutions now come with integrated payroll services that allow you to import financial data from these programs into your payroll system, so you don’t have to enter data manually.
This allows for a more accurate payroll process, reducing the chance of human error and making it easier on yourself when filing your taxes at year-end. Integrating your payroll with other business functions can help you reduce the time and effort required to complete payroll-related tasks, allowing you more time for other responsibilities. For instance, if you’re a small business owner, an integrated process can allow you to focus on growing your company while simultaneously having peace of mind that your payroll is being paid accurately and promptly.
8. Get the support you need when you need it
Sometimes, you may encounter payroll issues that you aren’t equipped to solve on your own. For instance, if there’s a complex tax law change or the IRS has questions about something in your payroll taxes, it might be best for you to seek out help from an expert. This expert can be a human resource professional or an accountant who is experienced in payroll processing. You don’t want to let your business suffer because you’re not able to solve the issue right away. That’s where finding help from someone with more expertise will come in handy.
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Managing your payroll process should be easy
With these tips in mind, your payroll process should be easier and more efficient. Whether you choose to outsource or handle it in-house, you should be able to get your payroll done faster. Remember that outsourcing doesn’t mean handing over responsibility for HR compliance and company culture. So, make sure the outsourcer is up to the task on these issues too. The benefits of a streamlined process are clear, but so are the time and effort involved in getting it up and running.
So, ensure you take time to understand what you need and where your company’s priorities lie. Only then can you implement the most efficient process possible.