It’s always a good thing to reassess your business processes every once in a while. What can you improve on? How can you make processes easier?
One process that many businesses struggle with is payroll. If your process is making you suffer, it’s time to switch things up by reevaluating your payroll process procedures.
Payroll processing procedures
Payroll process procedures can vary from business to business. They also differ depending on how you process payroll (which you will learn more about below).
For many businesses, payroll processing procedures include:
- Collecting time and attendance information
- Inputting payroll information
- Calculating payroll taxes
- Paying employees
- Providing employees with pay stubs
- Filing and depositing payroll taxes
It’s important for every business to organize and maintain payroll records in case a discrepancy or payroll audit comes up. You can store payroll records using digital files on your devices, the cloud (e.g., software), or a secure filing system (e.g., folders and cabinets).
Options for payroll processing
What you need to change in your payroll process depends on what method you use. You have a few options when it comes to processing payroll. You can:
- Calculate payroll by hand
- Use online or desktop software
- Outsource your payroll (e.g., PEO)
Luckily, if you run into problems and need to rethink your payroll process, you have plenty of options.
5 Signs it’s time to reevaluate your payroll process
You’re going to run into a few roadblocks when you’re responsible for managing payroll. You might forget to run payroll, need to spend extra time doing calculations by hand, or fail to keep up with it.
Maybe you’re in denial and not seeing the signs that it’s time for a change in payroll procedures. Or, perhaps you’re just too busy to even notice the flashing signs in front of you. If you run into one of the five indicators below, it might be time to reevaluate your payroll process.
1. Your business is growing
The fact that your business is growing is a great sign. But, it could also be a sign that it’s time to rethink the way you handle payroll.
If your company is hiring one employee after another, you may start struggling to keep up with payroll. This is especially true if you handle payroll by hand. The more employees you recruit, the more manual calculations you need to do.
If you’re handling payroll by hand and your business is growing, you might need to look into outsourcing payroll or using payroll software.
If your business is already using software to streamline your processes, you might want to consider looking into other payroll software options. Some software can only handle a certain number of employees (e.g., up to 50 employees). Make sure you find a software that will meet your business’s needs as it grows and hires employees.
2. You can’t keep up
Are you sick and tired of spending countless hours processing payroll? If you feel like there’s just not enough time in the day for your payroll responsibilities, you might need to do some reevaluating.
Contrary to many business owners’ beliefs, payroll processing does not have to be time-consuming. If you find yourself not being able to keep up with payroll, find ways to cut down on the time you spend doing it.
One way to reduce time while doing payroll is to let someone else handle the calculations and manual work for you. You can use a PEO to handle all of your payroll responsibilities for you. However, keep in mind that outsourcing payroll can get pricey.
If you’re handling a lot of payroll tasks manually, you can also simplify some of your responsibilities with software. Payroll software does all of the calculations for you. You can rest assured knowing the calculations are accurate. Plus, most software can print paychecks, offer direct deposit, and print pay stubs.
3. You’re spending too much money
If payroll is breaking your business’s bank, it may be a sign that it’s time to change up your payroll processing procedure.
When it comes to payroll, don’t be afraid to penny-pinch. There are plenty of payroll options out there that are affordable and reliable (e.g., Patriot Software).
If you feel like your business is spending too much money on processing payroll, look at other options. When it comes to software, take some time to research things like cost, features, and reviews. You might decide to switch payroll providers based on the information you find.
If you only run payroll for a few employees, you might consider going back to the basics. If you really want to save a buck, consider handling payroll taxes and calculations on your own. Sure, this method can be a little more time-consuming. But if you want to cut back on expenses, doing payroll by hand might be a good option for you.
4. You need a quicker payment method
Are your employees begging for direct deposit? Or, would they prefer a different method than your current one? If you answered yes to these questions, it’s a sign you might need to rethink your payroll’s payment method.
As a brief recap, employers have a few methods to choose from when it comes to paying employees. These payment options include:
- Handwritten or printed paychecks
- Mobile wallets
- Direct deposit
- Pay cards
If you’re looking for a quicker way to pay employees, reevaluate your business’s payment methods. Just be sure to check with your state to find out about different payment laws (e.g., pay card laws by state).
Talk with your bank to see if they offer direct deposit or pay card options. You can also take advantage of different methods using payroll software. If you already have payroll software, find out what kind of payment methods they offer.
5. You’re struggling to stay compliant
As you (hopefully) know, a significant part of processing payroll is handling payroll taxes. To remain compliant, you must accurately calculate, withhold, and remit applicable payroll taxes (e.g., FICA tax). Not staying compliant can spell doom for your business.
Struggling to stay compliant is a major sign that it’s time to rethink your process. If you’re missing payments, miscalculating taxes, or forgetting to file your payroll forms, consider taking your payroll process in a different direction.
If you want to make sure you’re compliant, you can:
- Find a full-service payroll software option
- Use an accountant
Full-service payroll not only handles payroll calculations for you, but it also deposits and files your payroll taxes on your behalf. Instead of worrying about remembering to file or pay on time, the software does it for you.
An accountant or CPA can also handle your payroll taxes for you. You don’t have to worry about calculating, filing, or depositing any of your payroll taxes. However, hiring an accountant to handle your tax filings and deposits can cost you additional money.
If you need a fast, affordable, and easy-to-use software, you’ve come to the right place. Patriot’s payroll software has the features you need to streamline your payroll tasks. And, we offer free, USA-based support. Get started with your self-guided demo today!
This article has been updated from its original publication date of September 18, 2019.
This is not intended as legal advice; for more information, please click here.