Small business payroll management can be a chore that a lot of small businesses would like to avoid. With the right tools and procedures, payroll can become a painless routine. Remember, while it might be a challenge for you, it’s incredibly important that your employees receive accurate compensation for their work. Here are six tips to help make that happen.
1. Choose the Right Payroll Schedule
When managing payroll for a small business it’s important to make the best use of your time. Understanding how often to pay your employees will help you better manage your payroll and it will determine how often you need to run it. The most important factor is the size of your company. Will you pay employees weekly, bi-weekly, monthly, etc? As your business grows, you might want to elect to pay employees less frequently because payroll will become more taxing.
2. Have a Clear Policy
Having a clear small business payroll policy from the get-go is important. Each employee should have to agree to the policy and it should include all relevant information about when they’ll be paid, how often, how much, and other considerations. Keep this information on file at all times and for at least six years after the employee has left or been terminated.
3. Ensure Accurate and up to Date Employee Records
As employers, we tend to gather a bunch of information all at once when we hire an employee but we never revisit it. It’s important that each employee has an up to date record and that they understand how to update this as well.
If employees move, get married, divorced, or many other things; it’s really important that their file is updated for accuracy and deduction purposes. This information will also get displayed on an advanced pay stub which they will need for loans, taxes, or rent.
4. Don’t Do Everything In-House
Small business payroll management doesn’t have to fall entirely on your back, a lot of small businesses make this mistake. They think just because they don’t have a lot of employees that they can’t outsource any of their payroll management. In fact, as much as 60 percent of small businesses outsource their payroll, you can too.
5. Have a Clear Budget
It’s one of the simpler payroll tips but an important one. Have a clear payroll budget. Don’t forget to factor in your Medicare and Social Security match as well as any other employment taxes that you have to pay. You’ll also want to include the cost of payroll software for your small business and any other expenses associated with processing the payroll and putting out pay stubs.
6. Make Sure Your Pay Stubs Are Accurate
Ensuring that you have accurate and legal pay stubs is crucial to your payroll processing. It’s also important for your employees if they ever have to apply for a credit card, a loan, or are trying to rent an apartment. They need at least a traditional pay stub with standard information such as pay period, gross wages, and employee information.
Small business payroll management is important and will help you grow your business. Developing the right habits and procedures now will prepare you for the future. We recommend using the pay stub generator from PayStubs 365 to quickly and easily pump out pay stubs without requiring a ton of time or a team of processors. Generate pay stubs today with our pay stub generator!