Whether you have a hundred or ten employees to pay, managing payroll is stressful and time-consuming. One error can lead to a series of misunderstandings and can be costly for the whole company. That's why it is crucial for people handling the payroll to be accurate and have attention to detail.
As a small business owner, you probably handle even the payroll department. To help you, here are some common errors that involve payroll and how payroll services make a difference in handling them.
Payroll Mistakes to Look Out For
With a process as complex as payroll, this aspect of the business is prone to errors. Here are some of the mistakes to watch concerning payroll.
Failure to track overtime work
Some of your employees extend their time to work for your company, and the best way to return their efforts is to ensure their overtime work is paid. It's a common complaint for workers not to receive their overtime pay, whether they worked for an hour or three hours and more. Make sure to have proper tracking systems in place to ensure proper compensation.
Moreover, be mindful of government laws concerning overtime pay. For example, there are specific rates for overtime pay depending if your employee works on a regular day or a holiday. Make sure your company complies with them to avoid unnecessary issues.
Delayed payment release
Being on time is an absolute must in releasing payroll. Your employees trust the admin to deliver the payment on time. However, payroll involves many steps like computing tax deductions, identifying employee benefits, and necessary reimbursements.
Delayed payments can greatly affect the morale of your employees and give a negative impression of your company's administration.
Failing to provide complete records
Having payroll records is important to the employees as well as the employers. Providing your employees with a record will give them transparency on their pay. Records will help your employee see all the necessary deductions and the total pay they receive. In addition, these records will help them clarify if their pay is accurate.
For employees, payroll records will come in handy when someone audits your business. In case of audits, keep at least three years' worth of payroll records for accuracy.
Raises, promotion and terminations
Raises and promotions of your employees are common and happen more often than you think. Promoted employees expect to see the changes in their salary effective as soon as possible. It's a common payroll mistake to overlook raises and promotion changes. The human resource department should have the proper documentation to identify the proper designation of your employees.
Moreover, it's also important for the employer to have updates on employee termination. For example, some payroll periods rely on the pay cycle and fail to see a terminated employee. This situation may lead to overcompensation which puts your company at a disadvantage.
Continuity of the payroll process
As long as your company is running, payroll is a continuous process. After releasing payroll, you must ensure that the next pay cycle is already running. It's a common mistake in the payroll department to forget to apply necessary changes in the next cycle. Whether it is for recalculating rates, bonuses, commissions, or other payroll-related matters, make sure to implement necessary changes.
Benefits of Online Payroll Services for Small Business
As much as possible, business owners want an error-free payroll. An efficient payroll system is one less thing to worry about. Many businesses outsource these tasks to payroll services and use payroll software. But are they necessary? Here are some advantages that businesses will get with payroll services.
Accurate calculations
As your business grows, naturally, the number of employees also increases. This means more people to pay, which in turn means more calculations that are more prone to human error. You don't have to worry about committing these errors with payroll services. All payroll computations are automated so that you won't make miscalculations.
Furthermore, payroll services keep your business in the loop with tax changes. The software automatically notifies the user of changes and directly applies them to the payroll. So you are sure your employees are compensated accordingly, and your business complies with current tax laws.
Always on schedule
When you switch to an online payroll service, you’ll be surprised at how fast the payroll process is compared to the traditional method. Aside from making fast computations, these services can also produce instant reports and statements with a few simple clicks. You don't need hours of waiting and tedious data recording to make them.
Moreover, being punctual in your payments gives your company a positive impression to your employees. Adhering to the schedule will motivate them and likely increase their productivity, which benefits the whole company.
Efficient time tracking
Most companies pay their employees depending on the time they spend working. That's why time tracking plays a critical role in ensuring a proper payroll process. Payroll software has built-in time trackers. This feature will save you time gaps from manual time recordings.
Employers can easily identify if their employees are eligible for overtime pay and the number of hours they need to pay them. Discrepancies in pay are less likely to happen when you have a reliable payroll system and software.
More data security
The human resource department will require personal information from employees to process the payroll. Automated payroll services offer more security to your employee's data. The system has restricted access and requires passwords. Only administrators and authorized persons can access the data.
Furthermore, these data are less likely to be lost compared to manual records. You can easily pull up information on bank details or social security numbers when your employee needs them.
No required expertise
You don't need to be an expert to use payroll software. Most of these tools have user-friendly interfaces, making them perfect even for business owners new to automated payroll management. Furthermore, payroll services have designated experts to help you with payroll.
These services provide unlimited support. Customer service is always ready to help and update with the changes with their system upgrades. So you will not be left not knowing how to operate your payroll management system.
Moreover, payroll software is a good starting ground for business owners with no background in payroll management. The software providers include onboarding to help train business owners to handle and learn more about payroll.
Online Payroll Services at Unloop
If you can’t decide which payroll service to get, Unloop offers payroll solutions for small businesses. Here are some inclusions that come with our payroll service.
- We’ll handle paying your employees for you. We will link your business to a cloud-based payroll system and manage everything for you.
- We can easily generate important reports and statements and send them to your employees for proper tax filing.
- We automate everything so you can easily organize and access reports when in need.
- We use the best payroll software suitable for your business. You have the option to use payroll software like Gusto, Quickbooks, Paychex, BambooHR, Humi, and Wagepoint.
- We have three different pricing points to cater to businesses of all sizes.
Final Thoughts
Payroll may be the most tedious department when owning a business, and simple errors can lead to a series of issues spreading through the company. We hope these common mistakes help you build a more reliable team for your payroll department. Moreover, take advantage of affordable payroll services and software for more efficient payroll management. If you’re looking for expert help for your growing business, Unloop has more to offer besides our payroll services. We have bookkeeping services, tax filing, and business forecasting. So book a call with our experts, and let's talk about what we can do for your business.