Do you run payroll for your employees?
Running payroll might seem like a straightforward process, but many moving parts can create issues and a poor experience for your employees.
Successfully running payroll is all about attention to detail. You’ll need to pay employees on time, pay taxes properly, and stay up to date with government forms. If you keep yourself organized and know how to avoid common mistakes, the process gets much smoother and faster.
Here are five common business payroll mistakes and how your company can easily avoid them.
1. Keeping Disorganized or Inaccurate Records
You can’t run payroll properly when your records aren’t accurate, or things are disorganized. Ensure you have up to date information (such as a home address, social security number, and classifications for workers) on file.
There are plenty of different HR or payroll tools available, such as ADP, that will help you store employee data securely and make it easy for employees to update data themselves as things change. This software will ensure your payroll is accurate every time.
2. Paying Employees Incorrect Amounts
Paying an employee the right amount each pay period isn’t as easy as it might seem. Some employees have unique payments, such as child support or workers compensation, that your payroll system must consider. Missing these details can create headaches for your employees and create issues with your state government and the IRS.
3. Forgetting Overtime Pay
If you have workers who put in overtime hours, you’ll need to make sure their pay statements are adjusted for the extra hours and pay they’re entitled to. To make the process easier, ensure your company uses a quality tracking system that documents exactly how much overtime your employees put in.
4. Missing Crucial Deadlines
Every payroll specialist needs a strict calendar so that they don’t miss important deadlines throughout the month. Federal and state agencies expect payments on time, and your business could be penalized with hefty fines if you miss important dates. Paying taxes on time is crucial, but so is avoiding late payments to your employees, so a payroll calendar ensures everything runs smoothly.
5. Not Training More Than One Person
Even in a small business, there should be more than one person on staff who knows how to manage payroll. Payroll runs on a tight calendar, and every deadline must be met for payments to go out on time to employees and for taxes to be paid. If someone is out sick or on vacation, another staff member must fill in for them and run payroll.
Learn More About Avoiding Common Business Payroll Mistakes
Running payroll is one of the most complicated aspects of running a business. There are plenty of common business payroll mistakes, which is why it’s important to be aware of what could go wrong and set yourself up for success.
It’s a good idea to invest in payroll software that will keep your business organized or turn to a payroll expert who can manage the process and ease your business headaches. If you’d like to learn more about running payroll or managing a small business, make sure you check out the rest of our website.