Payroll management is more than disbursing funds to employees on a monthly or bi-weekly frequency. It involves setting up payroll policies, frequency, calculations, sending payslips and many activities in between.
As a small business owner, it can be a daunting task running payroll yourself while having a myriad of other responsibilities to attend to. In the process of handling these many things at the same time, errors are inevitable and the burden quite heavy.
Challenges of managing payroll
Running payroll is probably one of the things that business owners do not have in their plans to manage when setting up a business as it is seen as one of those tasks that can always be managed one way or the other. However, as the business grows, running payroll can easily become a lot to handle.
Business owners are often faced with the challenges of record-keeping in payroll, over or underpayments, mixing up employees’ salaries, running payroll manually and many other errors that may not have been foreseen. These things can be easily managed with the right processes and tools.
How to manage payroll as a small business owner
Here are a few things that make managing payroll as a small business owner easier:
1. Be aware of employment laws and regulations
Employment laws protect the relationship between both employees and employers. Having knowledge of these laws protects you from being bullied by an employee or getting sued for unknowingly breaking some laws. It is best to have every necessary thing in place.
Depending on the state or country your business operates, payroll laws vary. Income tax is charged differently, minimum wage, penalties and disciplinary deductions also vary. In order to develop a proper payroll structure and make payroll easier, even in the future when your business eventually grows bigger, it is important to be law aware and compliant.
2. Set up a defined payroll structure
First, it is important to have a defined payroll structure. Do you have a certain day you pay your employees? Do you pay your employees once or twice a month? Is there a payment structure including the breakdown of salaries? If payday falls on a weekend, do you pay salaries the last day before the weekend or the next workday? From what day to what day is payroll calculated?
This way, making plans ahead, knowing what is needed for each payroll, and developing payroll policies even in lieu of a larger business eventually will be easier.
3. Automate Payroll Processes
Whether you have a payroll manager or you run payroll yourself as a business owner, automating some payroll processes makes payroll less difficult and burdensome. It also provides you with more time to attend to other important tasks.
A good payroll tool will allow you to set up your payroll frequency and payday, set up payments for each employee and make allowances for deductions, as well as easily account for income taxes, and other statutory payments. This takes away the stress of manually calculating these things, so you avoid errors and have more accurate numbers on your payroll.
4. Integrate your payroll tool with your accounting tool
Usually, it is best to have a suite of apps that contain both payroll and accounting apps, so you save time that would have been spent duplicating information and records. This way, you avoid errors that occur in double entry and moving data from one tool to another. Also, it helps you with record keeping and putting all your business numbers together.
A suite of apps to make managing payroll sweeting
In order to even make payroll more interesting and rich in data for analysis, it is best to have a suite of tools that not only contain payroll and accounting packages but an HR tool as well. Running Payroll does not have to be so difficult. Business owners now have access to the right information and the right tools to help them achieve their business goals. Check out our suite of apps for free.