How would your employees feel if their paychecks were delayed a week? According to the American Payroll Association, nearly 70% of employees would find it "very difficult" or "somewhat difficult" to make ends meet if they didn't get their paychecks on time.
Streamlining your employee payroll processes shows your employees how much you value them and reinforces your commitment to supporting their financial well-being. But payroll can be confusing and time-consuming, especially for small businesses with limited resources.
For them, deploying the tools and systems that simplify the payroll process can keep their employees happy and their businesses humming.
Understanding payroll tasks.
Payroll isn't just about crunching numbers every pay period. You'll also need to:
- Process payroll documents from new hires.
- Collect time sheets, if you track employee hours.
- Manage benefits, if you offer them.
- Calculate and send payments to employees, tax agencies, and benefits providers.
- Maintain payroll records.
- Prepare and send out annual payroll tax reports.
If you pay employees in different states, hire temp workers, or are quickly expanding your team, then your business's employee payroll processes are even more complex.
The benefits of payroll automation.
You might rely on spreadsheets to do your payroll calculations, but using dedicated payroll software could save you even more time.
Many payroll software providers automatically update their software when laws and requirements change, keeping your payroll calculations accurate. And some software boasts built-in tools that determine the correct payroll taxes for employees in different states.
Besides calculating payments, payroll software can also send funds directly to employees, government agencies, and benefits providers. Some software lets you file your payroll taxes automatically, and some includes end-of-year tax forms. Some software can even set your employee payroll up so that it runs itself.
These capabilities reduce manual input, saving you time and cutting down on errors. The best payroll software providers offer tiered subscription levels, too, so you can tailor services to suit your needs and budget.
Achieving the gold standard.
Here are a few other ways that payroll software can further boost efficiencies.
Integrate day-to-day tasks.
You can use a payroll software solution to:
- Collect and file payroll documents and employment forms when onboarding new hires.
- Manage employee benefits in one central place.
- Reduce manual data entry by integrating your payroll solution with your restaurant POS or retail POS.
You can also avoid duplicate work by linking your payroll software with your financial management system.
Keep electronic records.
Switching to electronic records makes organizing receipts, documents, and pay stubs easier. You could start by paying employees through direct deposit so that you'll receive a digital receipt instead of a paper one.
Digital tools for managing records can be helpful, too, if you have to hold on to a lot of paperwork. (And the digital records management tools that can integrate with payroll software are especially useful.)
Provide online access.
According to the American Payroll Association, about 6% of employees aren't very certain that their payroll withholdings and take-home pay are right every paycheck—and just under 4% aren't at all certain that they're properly paid for their work.
Dedicated payroll software can give employees online access to their paychecks, letting them see their withholdings, their benefit contributions, and their take-home pay on their preferred screens. Your employees will feel confident that they're being paid what they've earned—and they'll ask fewer questions about their paychecks, giving you more time to focus on business-critical tasks.
Growing and improving your business.
When your employee payroll process is efficient, your business is efficient. You and your staff can spend more time on broader strategic and process improvements.
You'll be able to analyze labor costs in greater depth, helping you identify patterns and anomalies, figure out labor costs per project, and keep project budgets in line with expectations. You could also leverage data to develop suitable salary ranges and optimize returns by improving staff allocation. And with the capacity to manage complex compliance issues and check for errors, there is less chance you'll make a costly mistake.
Ultimately, it takes a combination of skilled people, straightforward policies, and the latest technology to run payroll efficiently. But if you can, your reward is the time and energy to take your business to the next level.