Ideally, managing a company payroll shouldn’t be as hard as it usually seems. But with all the unique complexities, unseen variables, and demanding business requirements, you’ll realize that it’s actually a gigantic piece of cake. So, you must consider strengthening your payroll approach. The following are tips to help you out.
Overpriced payroll services
Most small businesses will be better off avoiding old school payroll services that are overpriced and cater to larger businesses. At this point in time, there are plenty of alternatives that can provide user friendly, feature packed services that are lower priced than traditional options. One such option should be an affordable online payroll solution that allows you to run payroll from the same software you’re using right now to track your company’s time. If you haven’t looked at payroll providers in a while and are just using the same provider your business was using 10 years ago, it’s worth a look at what’s out there now, You’re likely to find great options that will cost you much less money than the same old payroll service.
Blinders on payroll
Many business owners fall into deeper trouble by simply not overseeing their payroll (to an extent). Business owners tend to hire a payroll company or employee and then fully trust that everything is being done properly. This can cause a lot of problems if deposits are not being made timely or at all and the owner does not catch it early on. Try to implement a system of checks and balances instead of solely trusting and relying on one person to oversee your company’s entire payroll.
Paying employees assumptions
Knows all too well how making assumptions in payroll goes. The thing to avoid here is assuming that the current status continues without some proof. The employee may have moved to workers’ comp, or to long-term disability, or may have returned to full-time status. This should have you reviewing your paperwork/recordkeeping process. Making a schedule for receipt of timecards, new hire information, changes, etc. each period saves the back-and- forth that results from no scheduling!
Paying without documentation
Paying without proper documentation in other words, making a special payment from a verbal contact instead of with proper paperwork is a big no. What you need is to create a system of documentation so that there is always a paper trail for anything you do.
Audit programs
Not using an audit program is a big NO-NO. This includes not running audit programs and not always verifying that the hours and salaries that are being paid match what you expect them to be. It is now easier because most payroll systems allow you to create reports, or deliver pre-processing reports needed to verify totals prior to final acceptance of a payroll.
Unverified and unchecked passing a payroll
This is part two of verifying totals prior to allowing a payroll to be finalized. Always check reasonableness from cycle to cycle. For example, if your prior payroll gross was $50,000, and this one is $1 Million, you probably have a major issue. You do not want to let that go prior to checking and making the necessary changes. Always verify reasonableness at the very least prior to committing you payroll to final status.
Not being hands on with your payroll
Payroll is a team-managed process, and should remain that way. Remember that you and your team are ultimately responsible for your payroll and any errors that are made. Your vendor is not responsible for those errors. Don’t stand back and wait for someone else to figure out what is wrong. Have procedures in place to verify and audit your payroll prior to releasing it.
Manual Payroll Data Entry
According to experts, finding a way to escape time-consuming manual data entry is the key. Manually copying all the times from your timesheet system to your payroll processor is the killer of significant amount of time. In addition, manual entry allowed for errors to be introduced into the data. A company, which develops software integrations, will be able to tie their time entry system and their payroll system together. Integration is the key so everything can be done from one program.
Deadly Deductions
Making excessive payroll deductions is a slippery slope, so do so within reason and when it makes sense. Take for instance, docking pay from a salaried employee for missing time off work. This can destroy an employee’s exempt status, making him or her eligible for overtime (see our article on this). Also, deducting time whenever an hourly employee steps away from their desk, chats by the water cooler, or takes a bathroom break may also be viewed with suspicion. If you see a problematic behavioral pattern, consider counseling your employee instead of docking pay.
Last minute timesheets processing
Procrastination is a precarious trend that always lends itself easily to stress. If you use an automated time and attendance system, you won’t have to round up your company’s timesheets and key in the data manually. Instead, the time data will already be pre-entered and ready to process. With the right software, you can request two- or three-level approval of timesheets. Once all departments’ time data have been approved, you can export your timesheets to your payroll provider or process it internally with NO export/import required by upgrading to payroll software. Implementing these tips can help make our payroll procedure more routine, consistent, timely, and accurate.
