We know that managing payroll can be difficult for small business owners. This is time-consuming, complex, and one wrong move can result in incorrect payments and fines. Additionally, doing this process manually leaves a lot of room for human error (no matter how careful you are).
But payroll doesn’t have to be a headache. Automated payroll software can be a game changer in the digital realm, but there are other strategies you can use to streamline your processes more efficiently.
Whether you invest in a dedicated payroll solution or not, keep these steps and best practices in mind to keep your payroll running smoothly.
1. Establish a consistent schedule for running payroll
As the saying goes, consistency is key. And the same goes for salaries. Misaligned pay periods and pay dates can cause issues with employee satisfaction, company culture, and even retention. Not to mention, you’ll feel cluttered and disorganized. Lose, lose.
But setting up a regular paycheck frequency (weekly, biweekly, semi-monthly, or monthly) can keep you on the job. Establishing a schedule not only ensures that your employees are happy, but it also makes it much easier to track employee hours, calculate wages, deduct taxes, and make payments. Now we are talking win-win!
Adhering to the schedule will avoid delays, mistakes, and employee dissatisfaction.
2. Collect and validate data early when running payroll
For payroll to run efficiently, it’s very important to have accurate employee information upfront. This means double-checking details such as working hours, vacation, and changes in pay rates. If you don’t organize your information early on, you won’t be able to process your payroll correctly. Additionally, leaving these items until the last moment will create a payroll logjam that will quickly come back to haunt you.
To keep things simple, be proactive in collecting and verifying salary information upfront. Set clear procedures for employees to submit timesheets and attendance records on time. Also, don’t forget to stay up to date on your payroll and deductions. By staying organized and planning your payroll from the beginning, you can save valuable time and avoid costly mistakes.
3. Automate processes to streamline payroll
We’ve already touched on automation, but there’s a huge universe of automation strategies out there, and it’s important to understand the comprehensive benefits when it comes to payroll.
One of the top benefits of payroll software is that it eliminates the need for tedious manual data entry. Your head probably hurts just thinking about it. Here’s the solution. Manual data entry fills the plate to the brim. You’ll have to track your time and match it to your schedule, calculate your wages and taxes, and distribute your payments all by yourself. That’s the opposite of ideal for busy business owners.
Instead, your payroll software handles all the calculations for you. This not only saves you a lot of time, but also eliminates the possibility of human error, which can be damaging in many ways. Additionally, you can ensure that your data is 100% accurate before processing your payroll.
Next is the ability to integrate payroll with time tracking and accounting systems. Easily calculate, file, and direct deposit your taxes. No more categorizing separate programs and leaving room for error.
you can Use automation tools like Homebase, create a specified timeline for data collection, payroll processing, and payroll distribution. You can now track hours worked, overtime, and paid time off, and it’s automatically included in your payroll process to keep your paycheck in your pocket. Get everything in one place in a few easy steps.
4. Stay up to date on payroll laws and regulations
We can’t forget the legal side of things. As a small business, you need to stay on top of federal, state, and local payroll laws. Let’s be honest: when you have so much to juggle, legal requirements tend to fall to the bottom of your priority list.
There are many dotted “I’s” and “intersected T’s”. Follow salary regulations Minimum wages, overtime, working hours, record-keeping requirements, etc. It’s like juggling and riding a unicycle at the same time.
It is important to stay up to date with payroll laws and regulations to avoid serious consequences. This is another area where automated payroll software can be a good option. This simplifies the process so you can accurately calculate time and wages, pay and file taxes, distribute and submit forms, and save timecard records. Plus, you’ll receive notifications when the law changes.
5. Communicate clearly with employees about payroll
The truth is, if you don’t tell your employees exactly what they need to do to make payroll seamless (and get paid faster), you’re going to run into major obstacles. Coming to work late or not showing up at all, not submitting a timesheet, missing or incorrect personal information…you get the general idea. As the boss, it’s your job to provide clear guidelines on how and when to do these things.
Are there any changes to payroll policies and procedures? Employees need to know this too.
And remember, communication is a two-way street. If your employees have concerns or questions about the payroll process, chat with them one-on-one and find out where they can find solutions. Employees are the driving force that makes a business run.
6. Maintain accurate records and documentation
When dealing with payroll, it is essential to keep accurate and well-organized records. You need a reliable way to store and access all your payroll documents, including employee records, timesheets, tax documents, and payment history. Having paper trails and random digital files all over the place can create unnecessary roadblocks.
Set up a central system to keep your records safe and easy to find. This not only keeps your sensitive information safe, but also allows you to clearly record everything whenever you need it. Follow these guidelines to keep your records organized so you don’t lose anything important.
Here’s how to securely store and access your payroll information.
- Protect your data with automatic backups using an online database that you can access anytime, anywhere.
- Set up a digital document management system with secure cloud storage, version control, and easy access with search capabilities.
- Leverage secure cloud storage solutions like Google Drive, Dropbox, and OneDrive.
- Store printed physical documents in a binder or filing cabinet and organize them by employee, pay period, and year for easy access.
- Use secure spreadsheet templates to track employee records, timesheets, and other data, and be sure to set up access controls and backup procedures.
Whichever method you choose, be sure to include clear rules for document storage to ensure you’re always compliant with the law. This makes everything easier, reduces mistakes, and helps you stay compliant.
7. Prepare for payroll during holidays and special events
Yes, the magical moments of the holiday season are both exciting and incredibly hectic. If you don’t plan ahead, your vacation can impact your pay schedule and interrupt your payday. Instead of extending your payroll period until after holidays or office closures, be proactive and adjust your payroll schedule in advance. Your employees will definitely appreciate it!
If you plan to change payroll schedules, make sure your employees are informed in advance. People want and want to know when they will be paid. Not only will your employees appreciate it, but you won’t have to worry about it while enjoying your vacation.
However, unforeseen circumstances may occur (natural disasters, pandemics, IT issues, etc.). How can you prepare for disruptions that may impact your payroll? Enter the left stage: Payroll Contingency Plan. Here’s how to build it:
- Back up all your payroll data to multiple locations to avoid losing important information.
- Cross-train your employees on payroll basics and software solutions.
- Make sure you have cash available for emergencies.
Implement a simpler payroll process
Mastering these smart strategies will make managing your payroll smoother and less stressful. There are many ways to make this work, but some companies are leaning toward automated solutions.
You may think that new software is expensive and requires time and training. But you’ll be happy to hear that Homebase’s payroll software is free and incredibly easy to set up. It only takes a few steps.
The Homebase app is designed to make payroll and other administrative tasks easier than ever for small businesses like yours. Now you’re ready to use these strategies to minimize stress and pay your employees accurately and on time. let’s start.