Tips for Managing Small Business Payroll

payroll

No matter what type of small business you run, it’s essential to follow appropriate procedures when it comes to payroll. By gathering key information, having a clearly defined process, hiring qualified employees, and providing appropriate training, you can ensure that your workers are paid correctly and on time and that your company complies with all relevant laws.

Collect Information from Employees

When you hire a new worker, have that individual complete all necessary paperwork. That will include W-4 and I-9 forms and state and federal tax forms, as well as a form with banking information if the employee chooses to be paid via direct deposit. A worker may also decide to purchase health insurance and to invest in a company retirement plan. If so, money will need to be deducted from the employee’s pay to cover those costs.

A change in family status may impact an employee’s tax withholding and insurance premiums. Instruct workers to notify a member of the payroll staff immediately if they need to update their marital status, withholding, or other information. 

Create Clearly Defined Payroll Policies

Processing payroll can be complicated. When problems arise, they often occur because of confusion over policies and procedures. You may be able to avoid many issues by creating a clear process and by laying it out in a set of written instructions that are accessible to all payroll staff. 

When a new payroll employee is hired, have an existing employee train that person, if possible. A new worker will likely find it helpful to have someone who is intimately familiar with the procedure explain it and demonstrate how to use software. 

Provide Ongoing Training for Payroll Staff

Tax laws often change, which is why it’s essential for employees who handle payroll to stay up to date. Giving employees the training they need to understand how new tax laws will impact payroll processing can help them avoid errors that can waste time and money.

Consider Automating the Payroll Process to Prevent Errors

Processing payroll can be complicated. If workers must review timecards and input data manually, mistakes are bound to occur. An automated process that allows employees to clock in and out electronically can track their hours and calculate their earnings without the risk of human error.

Get Professional Help with Payroll

If your staff are overwhelmed by the burdens of processing payroll and don’t have enough time to devote to other important tasks, outsourcing may be the solution. DOAAR provides bookkeeping services that can help your business operate more efficiently. We can handle the complex and time-consuming payroll process so your employees can focus on other priorities. Contact us today to learn more!

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