Are you trying to find ways to simplify your small business payroll? When you started your business, you probably thought that paying people was relatively simple. After all, you must choose an hourly wage, withhold federal and local taxes, and send the remaining money to the employee’s bank account or print a payroll check. The truth of the matter is that paying your employees correctly, making sure the correct amount of taxes is withheld, and remaining compliant with all the labor laws can feel overwhelming. Thankfully, there are some things you can do to simplify your payroll and still ensure that everyone in your business gets paid correctly and on time.
1. Establish a Business Budget
The first step to setting up a simplified payroll involves establishing a business budget. You can do this by looking at your past and current revenue in order to estimate future revenue. From these numbers, determine what your business plans to spend on operating expenses, advertising, payroll and maintenance, like equipment repair and replacement, and janitorial services if your business has a physical location.
2. Create Separate Business Bank Accounts
Next, create bank accounts for your expenses. To accomplish this, you may want a bank account simply to accept payments for your products and/or services. Next, you’ll want to create accounts for your operating expenses, maintenance budget, advertising budget and especially, your payroll. Dedicated accounts for your business income and expenses can help you track them better.
3. Utilize Employee Time Tracking
If you’ve been entering your employees’ hours yourself as soon as you see them walk into the door or according to when they logged into your company’s computer system, consider letting your employees enter their hours worked. This can be accomplished via a time clock in your back room or a cloud-based time-tracking software, like ASAP Payroll’s Time and Attendance Platform.
4. Decide Whether Employees Should Be Hourly or Salary
Take the time to determine whether your employees should be hourly or salary. For managerial staff and employees with set weekly hours and days, giving them a yearly salary may make more sense rather than paying them hourly. If you have part-time employees or employees that don’t have set schedules, it may make more sense to have them as hourly employees.
5. Determine a Payroll Schedule
Most businesses, about 45 percent, opt to pay their employees every two weeks, according to the US Bureau of Labor Statistics. The second most common pay frequency is weekly with 31.8 percent of employers choosing this option. Of course, you can also choose to pay semi-monthly or monthly. It depends on what would work best for your business and your employees.
6. Set Reminders on Your Calendar for Important Payroll Dates
Along with having a dedicated payroll schedule, you’ll need to set up other important payroll reminders on your business calendar. Most businesses will need to calculate and pay certain payroll taxes, including FICA, social security, unemployment and Medicare. The exact pay schedule will depend on what the IRS dictated for your business. In order to help you stay compliant, your third-party payroll provider, like ASAP Payroll, may offer tax management services that can help you stay compliant and file your quarterly and annual tax reports.
7. Let Your Employees Manage Their Benefits and Tax Forms
Take advantage of benefits portals allowing employees to update their W-4s and I-9s. When an employee moves or their family size increases or decreases, they’ll need to update their tax forms in order to keep their payroll withholding accurate. A portal, like ASAP Payroll’s Employee Self-Service portal, allows your employees to view and update all of their HR and payroll information themselves.
8. Choose a Payroll Provider That Works With You
Lastly, choose a payroll provider that’s willing to get to know you and your business and work with you for the long term. Payroll providers that meet this criterion offer a range of services so that you can upgrade as your business grows. For example, as a small business with only a few employees, you might only want to take advantage of ASAP Payroll’s tax management, employee self-service and payroll services. However, as you grow and expand, you may want to take advantage of other payroll and employee services, including applicant tracking, background checks, task management and advanced scheduling and time tracking.
To get a quote for payroll processing services and to learn more about our HR services, contact us at ASAP payroll by dialing 317-887-2741 or by filling out our handy request quote form.
