<span id="hs_cos_wrapper_name" class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_text" style="" data-hs-cos-general-type="meta_field" data-hs-cos-type="text" >Payroll Best Practices: 5 Simple Ways to Improve Payroll Efficiency (Updated 2020)</span>

When it comes to payroll processing, there’s a lot at stake. When the average HR department devotes more than a third of its time to payroll activities, you could lose a lot of hours to inefficiencies.

What’s more, you might also be losing cash or even employees. Many small business owners pay penalties for late payroll remittances. Your employees are also monitoring their paychecks carefully. Many will start looking for a new job after just two errors.


Luckily, there are many changes you can make to improve payroll efficiency in your business. Start with one or all five of the methods listed here to make meaningful change today.


1. Adopt New Payroll Management Software


One of the most common causes for inefficiencies in the payroll department is actually how you conduct payroll. If you’re still doing things manually or you’re using outdated payroll software, it could be time to upgrade.


Good payroll management software is one of the easiest ways to improve payroll efficiency. It can turn hours of labor into minutes, simply by employing automation and connection across platforms.


Many business owners hesitate to invest in payroll management software. They’re concerned about the training, integration, or the costs. When you team up with the experts, you can get access to the software solutions you need to make running payroll even easier.


2. Enlist Your Employees


Getting employees involved in improving efficiency is a reliable tactic in many areas of your business, so you may not be surprised to hear that it can help in your payroll department too. You could engage your employees by asking for feedback and distributing payroll responsibilities among your team.


Business owners should communicate with employees to identify any areas of confusion and make sure they are addressed. Additionally, you could get more payroll help from your employees, even if they aren’t payroll experts. With training, your employees can take attendance, handle expense reports, and more. When everyone shares the work, you can lift the burden from your payroll team. When they don’t feel quite as rushed and stressed, they’ll make fewer mistakes.


3. Create Transparent Policies


Clear and transparent payroll policies allow your business to avoid mistakes that come from confusion about the payroll system. These types of misunderstandings may stem from a policy not being communicated clearly to an employee, or an employee being confused by the deductions you need to make from their paycheck.


When you focus on payroll issues such as underpaid taxes or employee misclassification, your business can make payroll efficiency part of daily operations. Clear policies allow employees to easily understand how payroll processes work, how employees are classified, and how salaries are determined.


4. Outsource Specific Aspects of Payroll


Outsourcing certain aspects of payroll can be a big relief for business owners. There are many benefits of partnering with a professional employer organization, including the ease in dealing with regulatory agencies, time and money saved, and extra value such as compliance monitoring or assistance with benefits or workers’ compensation insurance.


When you outsource specific aspects of payroll, you improve efficiency by avoiding compliance issues and focusing more of your time on your actual business. When you outsource, you’re putting your payroll activities in the hands of the experts, who can help you do payroll right.


5. Conduct Regular Audits


If your employees have frequent complaints about payroll, then you know something in the system isn’t working well. Ongoing concerns, as well as payroll mistakes, are signs that you should be conducting regular audits of the entire payroll process. The best way to isolate and identify a potential payroll issue is through a thorough workflow analysis. As you analyze each step of the process from beginning to end, it becomes much easier to see where issues are originating. From there, you can take steps to change the story and improve payroll processing for your business.


What Are You Leaving to Chance by Handling Payroll on Your Own