Small business owners have enough to worry about without adding payroll to the list. Payroll can be incredibly complicated, especially if you’re handling it yourself without the help of an accountant or payroll company. In order to make your small business payroll easier, here are seven strategies you can use to streamline your process and save time and money in the long run. Use these tips to make your small business payroll easier to handle, so you can focus on what really matters – your customers and your bottom line!
Pay your employees via direct deposit
Direct deposit is a great option for small businesses. By switching your payroll to a direct deposit solution, you'll have a streamlined payment process that saves time and money for your business. Plus, direct deposit ensures that your employees receive their wages faster—and direct deposits arrive on payday with no chance of delay from checks getting lost in transit or being cashed at an ATM by mistake. In fact, it's estimated that having employees sign up for direct-deposit services can save employers up to $5 per paycheck in administrative costs alone! Most companies simply enter how much they want to pay each employee into their payroll software, and let automation take care of things from there.
Streamline Payroll to Reduce Time Spent
One challenge of being a small business owner is that you have lots of responsibilities—and payroll is just one of them. It’s not uncommon for an entrepreneur or sole proprietor to spend several hours each month managing his or her own payroll, which can include tasks like collecting time cards, calculating deductions, and paying employees. This process isn’t only time-consuming, it’s also rife with potential errors. To streamline your payroll process, turn to online payroll software.
Stay informed of tax requirements
It’s easy for small business owners to become overwhelmed by tax laws. That's why it's important to make sure you’re staying up-to-date on any potential changes or requirements. However, if you hire a payroll firm, most of your tax responsibilities will be taken care of for you. If your business is too large for a payroll firm but too small for a full-time HR professional, consider working with an independent contractor who provides human resources consulting as well as administrative services. It can save you time and stress without draining your budget.
Choose the right software
Getting your small business payroll in order is much easier when you choose a software solution that provides everything you need. Most programs integrate time tracking and employee management, and some even calculate taxes for you. Look for software that meets your company’s needs and fits your budget, and take advantage of special offers or free trials to see how it works in real life. It might seem like a lot of work at first, but it will make paying employees—and getting paid—much easier for years to come.
Automate Where Possible
You don’t have time to manage your payroll processes manually—or you don’t want to, because automating your payroll makes it easier for you and your employees. software like UZIO take care of everything from onboarding new employees and calculating federal withholdings, to sending out paychecks every week or two. You can even direct deposit employee paychecks so they hit their accounts automatically on payday. If you have a lot of contractors, outsourcing payroll services can be a great option too—and luckily, there are plenty of providers that will walk you through it step-by-step.
Choose a suitable pay schedule for your employees
For some small businesses, it makes sense to pay employees weekly or every other week, especially if you have an on-demand business model. But for most small businesses, biweekly pay periods work best. Why? It gives both employer and employee some breathing room between checks -- which lets employees plan their spending more strategically (such as saving up for big purchases) while also giving employers more time between payments (which means they can hold on to their cash longer). It also helps avoid errors -- making mistakes in your payroll calculations is much less likely when you're not sending out payments each week.
Keeping track of your payroll taxes every year is a huge headache, but it can be made much easier with frequent audits. With an annual audit, you will stay on top of changing tax laws and avoid mistakes that can be costly in time or money. You’ll need to find a good bookkeeper or accountant that you trust for these regular audits. And most importantly: make sure you don’t forget about them! Having one every couple of months will help make payroll headaches a thing of the past.