Managing your payroll takes diligence, attention to detail, and persistence. With multiple processes, employee expectations, and regulatory mandates in play, payroll management is a complex, high-pressure task.
For small businesses with many competing demands, payroll can take key employees away from other, more critical work. Want to improve your payroll management? Consider the following 8 small business payroll processing tips.
Tip #1: Create a Payroll Calendar
Establishing a fixed calendar of dates when payroll is delivered is a way to help employees know when they are paid, when timecards are due and when to expect pay to hit their bank accounts. A calendar also helps your payroll team plan accordingly, scheduling when certain steps need to be completed to meet critical payroll deadlines. All employees will understand the timing, and you can account for holidays or busy timeframes to ensure your payroll timing stays on track.
Tip #2: Collect the Right Information
Accurate payrolls start with having the right details in place for each employee. This step involves working closely with human resources staff to coordinate the collection of information at the start of their employment.
Be sure that as a part of onboarding, HR staff is collecting the following:
- Form I-9 (work eligibility verification)
- Form W-4 and State W-4 (how much federal or state income taxes to be withheld from employee paychecks)
- Form W-9 (for contractors)
- Benefits forms (enrolling in benefits such as health insurance, long- or short-term disability plans, or retirement options)
These forms should be completed at the start of employment but may also be updated intermittently. All of these forms are necessary to complete payroll calculations.
Tip #3: Use and Integrate Time Tracking
Time tracking ensures that hours are tracked accurately. While time tracking is used primarily for employees who are paid hourly, they may also be used for salaried employees, especially if necessary for client billing scenarios.
Having an electronic time-tracking system saves time and reduces the risk and coordination of using paper systems.
These systems help you manage employee productivity and overtime and allow for electronic approvals. Having these systems can save time and ensure that employees have entered time and are paid accurately.
Look for solutions that integrate time tracking and payroll functions. Such systems ensure fewer payroll processing gaps and eliminate the need for system integrations or customizations.
Tip #4: Train Payroll Staff
Training your payroll staff on the processes, laws, and rules regarding payroll is essential. There are frequently changes and new details to consider. Having payroll employees who are up to speed on the changes, technologies and procedures helps the entire organization.
Tip #5: Cross-Train Human Resources Staff
As seen above, HR staff are essential partners in the payroll process. As part of your payroll training, consider HR employees as well. Doing so helps foster collaboration between the two departments and eliminates manual, repetitive, or mistakes in work. It can also reduce conflicts and help identify improvements in processes in both departments. In a pinch, HR staff may be able to help complete payroll processing if needed.
Tip #6: Seek Feedback from Employees
Your employees can be an exceptional resource for identifying opportunities to improve payroll processes. From onboarding paperwork to time tracking to scheduling to communication, employees are deeply invested in having successful payroll processes. By asking your employees for feedback, suggestions, and questions, you can add information that will enhance your payroll processing.
Tip #7: Select the Right Software Tools
Today, excellent technologies are available to manage time tracking and payroll processes. These technologies can automate and simplify all of the payroll management issues and connect with other internal systems, including human resources management, accounts receivable and accounts payable, and external systems used by banks and payment processors.
Tip #8: Consider Outsourcing Payroll Processing
With the extensive complexities of payroll processing, many small businesses choose to outsource the work instead. With an experienced partner like ASAP Payroll, businesses gain access to a knowledgeable expert who knows payroll management’s issues and challenges.
At ASAP Payroll, we help companies with a full range of business services, including payroll, time tracking, tax management, applicant tracking, onboarding, and employee benefits administration. Contact us today to learn more about how ASAP Payroll can help with your payroll processing.
