The payroll process can be challenging at times, especially for small businesses.
That is because most employers prefer to carry out this task without seeking external help. While this does save some extra bucks for the company, it also puts added pressure on the existing employees who are usually part of the HR department. That can lead to many inefficiencies in the payroll processing since the HR employees might not be skilled enough to care of such a complex responsibility. Discrepancies in the payroll can be catastrophic as they can offset the company’s accounting books and make the affected employees disgruntled.
To avoid all this hassle, companies are always trying to find ways to make the payroll process more organized and efficient. Companies must help reduce the stress factor that is associated with the responsibilities of a payroll processor. This will help minimize processing errors and also ensure that the employees receive their due payments in time. However, different regulatory policies specific to certain organizations can make it harder to streamline the payroll process. For example, companies that have policies like paid leave and late-coming penalties require a more sophisticated payroll management system to account for these adjustments.
Now that we have discussed some of the most common hindrances that business owners face during the payroll process, it is time to go over some useful recommendations that can help you make your company’s payroll more efficient and accurate.
Enforce Clear and Transparent Policies
The key is to keep the entire process as simple as possible. The first step is for companies is to analyze their current practices and figure out how their policies can be made more straightforward. Usually, policies like expense reimbursement, attendance, and paid time off make payroll management much more complicated.
To ensure that everything runs smoothly, entrepreneurs should bring their employees up to speed with all their company policies regarding the payroll process. Taking it a step further, employers can work on unified policies for the entire workforce. This would streamline the whole process and make it even more efficient.
Having different policies for employees at different positions is not recommended since it requires the payroll staff to weigh in various factors for each employee before finalizing their allowance, which leads to more complications and eventually more discrepancies in the final payroll announcement.
The payroll staff should be encouraged to plan ahead so that they do not get overwhelmed when it is time to distribute the allowances. Companies must maintain a level of organization to ensure all essential moving parts of the payroll process are taken care of and accounted for efficiently.
For example, important documents and paperwork should be kept ready beforehand to avoid panic during the final few days of the month. A very effective method is to create a departmental calendar that highlights all the important deadlines regarding the payroll process. Once everyone in the department is aware of how they should manage the payroll process, their efficiency automatically skyrockets.
Enlist Your Employees
This can do wonders for small business owners. Enlisting different employees to perform duties for the payroll department can improve the efficiency of the whole process. That takes the responsibility off the shoulders of a select few people and divides them evenly amongst a larger pool of employees resulting in greater productivity.
Furthermore, employees should be encouraged to give feedback regarding the payroll management process, both positive and negative. That will help the company identify potential areas of weaknesses and work towards improving them.
Seek External Help
Businesses can outsource specific responsibilities related to the payroll process. That will automatically lessen the burden on the workforce and make the process less hectic and more cost-effective. To make a better case for this approach, let’s look at some of the benefits of partnering with a professional employer organization.
First and foremost, it makes dealing with regulatory authorities much easy. Outsourcing payroll allows you to comply with all laws and regulations in a much more effective manner, and it can help improve productivity within your office. What’s more, is that it helps with compliance monitoring and assistance with workers’ compensation insurance. When you outsource your payroll process, your employees can focus on other more pressing business-related tasks while someone more professional takes care of the payroll.
To assist companies with payroll management, the professionals behind Finvisor point out that a complete solution for all your back office and financial needs is required. This includes an online accounting, payroll, and CFO team to take over all your financial operations while you focus on growing your business.
Use Payroll Management Software
With the rapid digitization of the corporate industry, manual processing of data has become an outdated concept. The same is holds for payroll management. One of the most common reasons for discrepancies in the payroll process stems from how a business conducts its payroll. If your company is still stuck on the manual system of payroll processing, it is time to upgrade.
There are many payroll management software available in the market that can help you automate the tiresome, time-consuming process into a job worth only a few minutes. Also, it improves accessibility and allows you to stay connected across different platforms. This way, the payroll staff can share their responsibilities in an organized manner. Since all of the payroll data is now digital, it provides employees the luxury to take care of the payroll process from within the comfort of their living rooms while maintaining connectivity with their colleagues.
Adopt a Direct Deposit Model
If the payroll process is slowing you down, you should consider reevaluating your payment model. Switching to pay through direct deposit can save time as you would not have to print and distribute checks. Not to mention, you will not have to worry about ordering supplies such as ink and check stock regularly.
Direct deposit is quickly gaining prominence in the business world. It is the electronic transfer of money from one bank account to another. If you have not already adopted this model, it is time you make the switch. According to many independent studies, direct deposit can help employers save more money in the long run. It is better than the conventional method of payroll processing and distribution.
Payroll management is one of the most significant expenses for any business and the most critical element of successful operations. Managing payroll can often be complicated and time-consuming and can quickly turn into an administrative nightmare if not handled correctly.
Businesses must always be looking for ways to make their payroll process more efficient and accurate to maintain employee satisfaction and remain financially stable.