This Is How You Can Make The Payroll Process More Strategic And Organized
The payroll process can be a time-consuming and tedious undertaking, but if you handle it strategically and with organization, you can make sure that all of your employees are paid on time every week without the risk of human error or missed payments.
It’s important to handle payroll with care, especially if your company is of any size or has more than one employee; but if you’re organized about it, handling payroll doesn’t have to be difficult at all!
If you keep these tips in mind when designing your process, you’ll find that it becomes more strategic and organized right away.
Steps To Make The Process More Organized
Research The Market
Payroll is, in many ways, a microcosm of your entire business. It’s where you hire people to do specific work that creates revenue; it’s an ongoing operational cost; it’s something that touches every single person on your team.
Understanding your payroll system’s interrelationship with all these other elements will help ensure that your business runs smoothly (and profitably) down the road.
Start by learning about what other companies are doing with their payroll software. Check out different websites about small-business management, look at similar businesses to yours online, contact HR professionals in larger companies for advice, or speak to industry groups like associations or trade groups about trends in pay practices.
Centralize Your Payroll Processes
Payroll processes are an integral part of any HR department. Successful organizations have streamlined their processes to make sure that they’re complying with federal requirements, paying employees accurately and on time, managing benefits administration, tracking expenses associated with paychecks, etc.
A unified approach allows you to ensure that all your functions are working together towards a common goal—and that means better employee satisfaction.
Payroll shouldn’t be just one of many administrative functions in your company; it should be an essential piece of your overall strategy for keeping employees happy.
If your business is anything like many others, it’s easy to see where time might get lost when creating paychecks. By streamlining remuneration in your HR strategy, you’ll be able to work with greater efficiency in a way that saves both time and money.
The first thing to do when making your HR strategies more streamlined? Work on eliminating paper forms whenever possible.
For employees, ask them to submit their timesheets electronically for review by management instead of printing out hard copies that are then sorted, signed, counted, stored — then later resubmitted during another periodical review.
This one small change will help you move away from an antiquated method of tracking time while also saving money on printing costs.
Examine Employee Demographics
Looking at salary distributions for your entire employee base is a good way to identify inequities. This gives you an idea of where your organization might need to adjust compensation scales for different positions or departments.
If you notice that, for example, people who are of a certain gender are systematically making less than others with similar skill sets, it’s time to do something about it—ideally before an Equal Pay Act complaint becomes necessary.
Doing so could help reduce employee turnover and improve engagement by showing employees that they’re valued members of your team.
Deal With Expenses Wisely
Payroll expenses are some of an entrepreneur’s largest ongoing costs. That’s why many experts recommend managing them on a month-to-month basis rather than waiting until payday to cover them all at once.
Doing so lets you control spending by adjusting your labor needs, meaning that if the business is slow one month, you can cut back on labor hours or give employees part-time hours; meanwhile, if business is good, you may be able to expand your workforce without hiring additional staff.
Payroll expense management also helps ensure that you’ll always have enough money in your account to pay your employees.
Manage Direct Deposit Closely
Direct deposit has become one of the most popular ways to get your employees’ paychecks. Many companies see it as a convenient way to send their employees’ money but also get an added bonus of ensuring that everyone shows up on time.
But the direct deposit isn’t all it’s cracked up to be—especially if you don’t manage your direct deposit closely enough. Make sure your workers know that every paycheck will reflect accurate deductions for federal taxes, state income tax, Medicare, Social Security tax, and any other withholdings before they sign up for a direct deposit.
It is critical that employees understand exactly what portion of their pay will be deducted off when it comes in each week so they aren’t surprised come payday.
Handle Holiday Pay Easily
It’s an unfortunate fact of life, but there are people in your company who will miss work on December 24 or December 25.
If that isn’t a disaster in itself, consider that December 26—the day after Christmas—is generally a paid day off for everyone else. It’s called Boxing Day because it’s traditionally when retailers distribute their year-end bonuses to employees.
That means your company will have twice as many absences during an already busy time of year, so do everything you can to minimize disruptions.