For many small business owners, the process of payroll can be very bothersome and time-consuming. It can be even more so if you don’t have an outside firm doing it for you. The National Business Association conducted a survey in 2013 in which they determined that about sixty percent of small businesses process their payroll themselves. For obvious reasons like IRS penalties or possibly disgruntled employees, it is important to handle your payroll properly and with care. Here are some tips to make your payroll go as smoothly as possible.
One of the main things to determine in setting up a payroll system is whether you are going to pay your employees by salary or hourly. By having salaried employees, you can take a lot of the figuring out of determining how many hours your employees worked each month exactly and therefore how much they should be paid. If you do opt to pay your employees hourly, it is incumbent upon you to have some sort of dedicated system that tracks every employees hours worked.
Another thing that you have to decide on is the frequency in which you will pay your employees. The standard options being monthly, bi-weekly and weekly. Most employees typically prefer weekly, but paying bi-weekly or monthly can make it easier for you to handle paperwork wise since you’ll be cutting less checks. Classifying your workers such as by full-time, part-time, contractors and interns can help you stay organized and make it easier when it comes time to pay them as well as for when it comes time to file taxes.
When choosing a payroll software, you should choose an option that is based on the cloud. By choosing a cloud-based payroll software, if anything happens to your computer or system, you won’t lose all your data. This is also an easy way to keep all your information in one place. The National Business Association says that twenty-seven percent of small business owners are spending three to five hours per month handling payroll. By simplifying this process, it can be possible for you to save time and money. Some payroll softwares allow you to automatically pay state and federal taxes. This can prevent you from forgetting and/or not setting aside enough money to pay them. Regardless of what methods you chose to employ, it is important to keep track of everything. Keeping all of your documents in one place can help make your payroll process a breeze.