For any new business, it is very important to keep efficiency at the forefront of everything, simply because it isn’t wise to be spending more money on unnecessary expenses. This includes managing your finances smartly, especially where payroll is concerned.
The payroll system is one of the most important things in a business that must be polished and streamlined. Employees will expect their company payroll system to be efficient and hassle-free with no errors. Besides getting the necessary papers ready, it is also important for a business to choose their payroll system.
Gone are the days when accountants and human resource people had to spend hours doing the books, especially for the bi-monthly payroll. In today’s modern world, they will be glad to know that computerized payroll systems have been developed. So whether a company has five or five hundred employees, life is made easier as they don’t have to crunch numbers through the night.
Here are some tips for startup businesses to help manage and streamline their payroll process, and keep you from getting stressed each time payday comes around.
· Have all necessary paperwork done. [/b]This will include tax and legal business papers of the employer, necessary permits and the like. You will also need to gather relevant documents of your employees, to make sure that deductibles like tax are done properly without any surprises when tax filing season comes along. Having these on hand will give you a sure idea on the payables due to your employees, and what you have to pay each year for taxes.
· Check the contracts of your employees.[/b] If you have employees that are considered independent contractors, they will have a different tax bracket and income return. You may even want to consider having a different payout period for independent contractors so that there is less confusion. Be sure you are aware of compensation terms for ALL your employees, including paid time off, bonuses and the like.
· Decide on your payroll system.[/b] These days, it is much smarter to invest in computerized payroll system software that will do all the nitty-gritty calculations for you. This can be outsourced or kept in-house, but whichever way you choose, the software will automatically calculate payroll for the period, deductibles, earned leaves and the like. It saves accountants a lot of time, and the business a lot of money since it is less prone to errors.
· Back up all records regularly.[/b] Choose a payroll system provider that regularly backs up all your data, so that it is not all lost in case something happens. It would also be best if you get one that has good after-sales customer service, so that you can easily call for support if needed.
· Pay taxes.[/b] Finally, when everything is set up and done, be sure to pay your taxes accordingly! This is a no-brainer, but it’s always wise to check up on the status of taxes filed, especially if you have an accountant handling the payroll and are not directly overseeing it.