Every business has certain tasks they must complete. These essential functions can vary between industries and businesses, but there are certain activities that all businesses must complete. Payroll is one of the most essential functions of any business; after all, you will not have any employees if you do not pay them.
Though it may seem deceptively simple, handling payroll can be complex, difficult and time consuming. Payroll involves three primary phases:
For your hourly employees, tracking the hours worked in the first step of payroll. For your salaried employees, you must ensure they are completing their assigned tasks. Tracking hours is essential to ensure that everyone receives the proper wages.
- Calculating and Tracking Deductions
There are many possible deductions, some legally mandated and some optional. Whether they are for Social Security, Income Taxes, health insurance, union dues or retirement, you must calculate the proper deductions and ensure that the funds get to the proper payees.
- Preparing Checks and Paystubs
Printing checks is no longer a concern for most businesses, but you may need to arrange direct deposits with dozens of financial institutions.
These seemingly simple tasks are not terribly difficult, but they can quickly become a headache. Thankfully, technology has made the challenge easier to manage. Today, businesses may choose to manage their own payroll or hire an outside provider. Either way, technology makes the process better, in every part of the process.
Mechanical time clocks may be the old-school solution, but they are still effective. However, mechanical time clocks have one major problem: the information from the timecard must be recorded, often by hand. This opens the door for mistakes.
Electronic Hours Tracking systems offer greater versatility, reliability and accountability. In these systems, your employees swipe a badge, enter a code or use biometric identification when they start and finish work. Then, these systems interface with local or cloud-based software solutions to record hours worked.
Calculation and Deductions
These have become functions of software. Once the software has been programmed with the appropriate guidelines for income tax withholding, union dues and any other deductions, it automatically calculates the appropriate wages, deductions and adjustments for every employee. Whether you handle it in-house or contract with an outside provider, software takes the guesswork out of the process.
Preparing Checks and Paystubs
Direct Deposit is the standard method of paying your employees, and many employees may opt to receive their paystubs electronically. However, even if you are not physically printing and distributing checks, it is still a challenge to make sure that all the paperwork, electronically or otherwise gets to the proper place on time. At the end of the day, employees need to have their wages transferred to their bank while taxes and other deductions go to their respective destinations.
Payroll is an essential function of every business. Once you include tracking work time, calculating deductions and distributing funds, the process can become a real headache. Technology has made many aspects of business easier and simple; payroll is no exception.
Some businesses keep their payroll in-house, but outsourcing the process to payroll providers is a popular option. Either way, getting payroll done is an essential function of every business. No matter how you choose to accomplish this goal, technology makes the process faster, easier and more reliable. Contact Paypro today, we can make your payroll process an easy one!