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40 percent of small business owners say doing taxes and bookkeeping are the worst part of running a business. If you’re struggling with payroll, you’re probably one of these businesses owners.
But here’s the thing: you have no choice but to keep both hands on your payroll. If you don’t, the result is inaccurate or delayed salaries, which, needless to say, is the easiest way to demotivate your workers. Plus, government auditors will soon be knocking your door.
The good news? You don’t have to be a qualified accountant to manage payroll for your small business. All you need to do is use the following tips.
Understand the Basics of Payroll Processing
The first step to managing payroll is to understand what payroll processing involves.
Payroll has four elements:
- Gross wages
- Benefits (includes health insurance and retirement plans)
- Social security and medicare
- Tax withholdings.
When you have a good understanding of these elements, you’ll be well on your way to processing your payroll. Of course, these factors might vary depending on the nature of your business and the types of employees your business hires. For example, you’ll need to calculate the wages of full-time and contractors differently because you won’t withhold taxes for a contracted worker.
Use Payroll Software
Payroll software takes the guesswork out your payroll management. The various payroll elements are built into the software, which means that you only have to input employee details.
However, payroll software isn’t all the same. Some are more efficient than others. Try out a couple of programs (many offer short trial periods without premium feature restrictions) before making a decision.
Besides using multifunctional payroll software, you can also rely on stand-alone tools that perform specific tasks, like this pay stub generator.
Keep an Eye on Payroll Laws and Regulations
Payroll laws and regulations are always changing, both at the federal and state levels. You have to stay abreast of these changes; otherwise, your business will inadvertently be in violation of the law and risk hefty fines.
The Tax Cut and Jobs Act of 2017 is a good example of a recent law that affected how millions of businesses around the country process payroll.
An ideal way to stay aware of legal changes is to watch national and local business news. You can also follow reputable business journalists on social media.
Outsource to a Payroll Service Provider
Even with the three handy tips above, managing your payroll efficiently can still be a challenge. As your small business grows and brings in more employees, processing payroll will only get more complex.
Why not outsource the task to the experts?
A payroll services provider will not only bring order, efficiency, and accuracy to your payroll, but also save you money.
Manage Payroll the Easy Way
Payroll is a crucial function in any business. But while large businesses have the financial capacity to maintain an in-house payroll department, small business owners have to do it on their own. Lucky for you, this guide has the information you need to manage payroll in an efficient manner.
Keep reading our blog for business tips and hacks.