Processing your payroll can be a time-consuming, labor-intensive endeavor. Employers today have employees working various schedules, from home and the office. Payrolls include full- and part-time staff and freelancers or contractors, with each group requiring different ways to track and manage hours.
The pressure is on employers to deliver payrolls on time and accurately. That’s why it’s essential that employers look for ways to simplify and automate payroll processing whenever possible. Here are a few best practices to simplify payroll processing work.
Simplify Your Pay Schedules
Does your organization have multiple pay schedules, with some employees paid weekly, biweekly and monthly? While it may make sense to have multiple schedules, it creates complexities that can lead to errors in processing.
Moving to fewer pay cycles lets you eliminate duplication of processes. The most efficient schedule would be to have all employees paid simultaneously, allowing payroll staff to maintain just one process.
Create Clear Payroll Processes
Developing clear, easy-to-understand payroll processes ensures everyone is on the same page. Processes help employees understand the way payroll is managed and their own responsibilities. Establishing these policies can help ensure compliance and consistency while avoiding penalties.
Policies should include:
- How the payroll process operates
- How employees are classified
- How salaries and wages are calculated
- Reporting requirements
- How benefits are calculated and incorporated into payroll
- Company policies regarding payroll errors
Information about these policies should be shared with all employees and accessible. Put the policies in writing and encourage employees to ask questions.
Commit to Payroll Software
Great payroll software serves multiple purposes for your organization. For one, it helps employees submit and track their time. It also manages and simplifies payroll processes, reducing or eliminating the need for manual work.
With advances in technology via artificial intelligence and automation, there are dramatic changes in how payroll software works. If your organization does not use payroll software, now is the time to evaluate options. If your existing payroll software is outdated, consider upgrading to a system that will save time and money while reducing errors.
Audit Your Procedures
How do you know if your payroll operations are efficient, compliant, and serving the needs of your employees? A regular audit of payroll procedures can help analyze your complete workflow and evaluate where adjustments are necessary.
A thorough payroll audit should consider:
- Testing of software applications, including how they are integrated with other business systems and the use of add-ons or customizations
- How payroll processes operate throughout the organization
- How employees are trained on payroll
- Time and attendance software
- Compliance with tax and employee qualification requirements
Know the Tax Requirements
Understanding the complex maze of federal and state tax requirements is essential for effective payroll processing. There are constantly shifting payroll tax rules and requirements. Failure to comply can have devastating consequences for your business and your employees.
To avoid compliance penalties, be sure to assess your processes for compliance with payroll deductions, remittance procedures, pension payments, insurance, bonuses, and salary increases as they relate to taxes.
Consider Paperless Payroll
Paper can be the bane of any payroll process. There is more risk of mistakes, and the loss of sensitive paper documents can be problematic.
Going paperless with your payroll is easy to do today. It’s a great way to go green, reduce costs and protect company and employee data. Paperless payrolls eliminate the need for time cards, time sheets, paper pay stubs, and physical paychecks. Technology today allows for electronic time entry and approval, virtual pay stubs, and tracking of pay over time.
Train and Educate Regularly
Regular training on payroll policies and procedures is necessary, especially for your HR and finance departments. With rules changing frequently, new technologies, and increased regulations, it’s important that all key staff understand the implications for your payroll operations.
Outsource Your Payroll Servicing
The dynamics of payroll management are complex, especially for small and medium-sized businesses. Managing processes, systems, and rules can be burdensome for some businesses.
If payroll is preventing your staff from completing more critical tasks, consider outsourcing your payroll management. Payroll management companies like ASAP Payroll take the stress and worry out of your payroll operations.
Ensure taxes are correctly processed in payroll deductions, remittances, pension payments, insurance, bonuses, and salary increases to avoid penalties. Contact us today to learn more about how ASAP Payroll can manage your payroll.
