— April 9, 2018
That’s how long the average small business owner spends on payroll functions each month.
What if you could use that time on tasks that could actually make money for your business? You could be spending quality time interacting with customers, rolling out a new marketing strategy, or researching resumes to hire your next sales manager.
No matter if you outsource payroll or handle it in-house, there are ways you can improve payroll efficiency. I’ll tell you how.
Ways to run payroll more efficiently:
1. Ensure all employees understand the policies when it comes to payroll.
Having an employee handbook can help with this. This will help eliminate questions pertaining to important topics such as: paid time off policies, leave policies, etc.
If you’re able to direct your employees to the handbook, you can avoid being bombarded with questions coming directly to you and taking time away from running payroll efficiently.
2. Organization plays a big role in payroll efficiency.
As with many business functions, being able to stay organized will dramatically help when it comes time to process your payroll each week.
Wouldn’t it be nice to not have to scramble to ensure everyone has handed in a timecard, not missed any punches for the pay period, or make last minute garnishment/direct deposit changes? All these tasks can make you have to stop in the middle of the payroll to resolve the items.
3. Time really is money.
Make sure to allow appropriate time each week to devote to running payroll. As a small business owner, you’re often running a mile a minute, trying to fit everything in.
Set some time aside each week to be able to handle payroll. This will ensure that you’re not having to rush through it and risk missing any important items that need to be entered.
4. Streamline your payroll systems.
Consider syncing your payroll functions with an automated time and attendance system. This way, when someone punches in, you don’t have to worry about manually transferring that information to your payroll system. You’ll save time, as well as eliminate the possibility for data entry errors.
5. Be proactive in your payroll approach.
Julia Rohan, owner of pet services business Rover-Time explains that they take a proactive approach when it comes to improving payroll efficiency.
“It truly does come down to the team’s effort as a whole. For example, how proactive is the employee on adding additional notes to their punch on days when they’re running slower than normal? Do they take the time to anticipate management’s concerns or do they wait for us to question their reporting? One thing we’ve worked on is that push to get as much info as we can with each entry,” explained Rohan.
6. Outsource your payroll functions to a trusted provider.
One of the easiest ways to improve your payroll process is to outsource to a trusted vendor. If you’re still running payroll in-house, here are a few things you should know:
A payroll provider can help eliminate common errors made when doing payroll in-house, like misclassifying employees, incorrectly withholding taxes, or not understanding appropriate pre-tax/post tax earnings and deductions.
A trusted payroll vendor can also help keep you compliant. From one employee to 100, you as the employer still hold the responsibility of filing tax returns and sending payroll tax payments. This requires complete compliance around the ever-changing legislation updates and timing requirements for how payroll tax is calculated and paid.
The original version of this article can be found here.