Mismanaging your company's payroll is one of the biggest mistakes you can make, leading to dissatisfied employees and potential legal trouble. By streamlining your payroll service to avoid critical errors, you can keep your business in line for growth. Take the time to analyze your approach to payroll, and make sure that you are avoiding these common mistakes.
Remember that traditional employees and independent contractors need to be classified differently to ensure proper taxation and payroll processing. If you have international employees, you will need to handle their payments differently as well, so look into their country's payment laws.
Miscalculating overtime—or forgetting to include it altogether—could violate labor laws, so be sure that you are double checking whether certain employees went over hours. There are payroll companies for small business available to help you avoid this oversight.
Paying Your Employees Late
Nothing is worse than not receiving your paycheck when you expect it. Not only will this put your workers in a financial bind, but it will color their opinion of you and the company. Late payments are irresponsible and can harm employee retention, so be sure to always make payroll a priority.
Failing to keep thorough payroll records or skipping this step can also lead to legal trouble. You need to be able to cross check employee payment records with their individual pay stubs to spot errors. It is also important for calculating how much of your budget should be allocated for employee salaries.
Stretching Your HR Department
If your payroll is happening completely in-house, you are leaving too much room for error. HR departments are busy, so it can be easy to overlook simple mistakes. This is where payroll companies for small business come in. By choosing payroll outsourcing, you can leave this important job to the professionals.
Especially when small businesses are just starting off, one of the main potential problems they face is reliable payroll processing. And any errors can by complex, risky, and expensive. By outsourcing your payroll to a professional service, you can keep this part of your budget in line. This way, you can focus on the other operations of your business while knowing that your employees are getting paid in full and on time.