This article is from our friends at Red Wing Software.
Processing payroll can be a time-consuming and complex process for any business, and can be especially difficult for a business that continues to grow. Growth of a company typically means more benefits, multiple state payrolls, additional pay methods (e.g. hourly, salaried, overtime, etc.), more complex payroll tax filing requirements, and a host of other concerns. And while this can be difficult to manage, there are ways to simplify the process of payroll and all of its components. Here are some ways employers can streamline the process stay in control of payroll as their company grows.
Using direct deposit as a method for paying employers provides a significant savings in time, as well as labor costs. Direct deposit is the process of sending employee pay directly to employee bank accounts, via ACH file. Many expenses can be eliminated by using direct deposit, such as printed checks, envelopes, printer ink, and stamps. Labor to print and distribute checks, as well as printing and envelope stuffing and stamping can be eliminated, since direct deposit pay stubs can simply be printed on plain paper, referred to as a ‘pay advice’. An employer can take it a step further and allow employees to view their pay advice via a portal. This enables a paper-free payroll, and also eliminates the need to search for pay information for employees, as they are able to access it anytime.
Electronic tax filing
Electronic tax filing, or ‘eFiling’, based on the number of employees, may be required by the Federal government, and by a growing number of states as well. Though it may seem like a big step to take, eFiling greatly simplifies the process of payroll tax filing. Rather than print and send forms, the payroll system pulls the information and the filing is all done electronically. One thing to keep in mind is that, businesses that are using a payroll service typically have the service do the tax filing on their behalf, so this burden is taken off the employer, and they do not need to complete the filing themselves.
Remembering key dates is crucial for those who process payroll, especially when in-house payroll software is used, rather than a payroll service. Employers are required to report payroll taxes to the appropriate jurisdiction, and must report it in the manner that jurisdiction requires. These can be required every pay run, monthly, quarterly or annual depending on the amount of tax and the entity. Quarterly and annual reporting of income tax withholding and social security taxes is required in most jurisdictions. Employers must also file unemployment tax quarterly and annually with each state and at the Federal level. Keeping track of all these dates can be overwhelming. Setting up reminders in either a payroll system or within one’s own calendar is a good way to remember these days, and be sure to be sure information is transmitted on time, to avoid costly penalties.
When a company needs to update a piece of information that affects all employees, or a certain group of employees, time can be saved by making those edits all at once with a mass update function, rather than changing each employee’s record manually. Information that may typically be mass-updated include deductions and benefits, earnings, payroll information, leave, or taxes. An added benefit to mass-updating is the reduction in potential of manual entry errors. Most modern payroll systems have this feature — if your company is growing quickly and you do not currently have this functionality, you may want to look into options that will help you more easily make quick changes as you scale your payroll processes.
Time entry, one of the most time-consuming processes within payroll, can be greatly simplified with the use of a time-keeping device for those employees who enter hours worked. Such a device can eliminate manual entry of hours, which is not only time-consuming but can also lead to data entry errors. Using a time clock allows for the import of hours from the time clock into the payroll system. An employer can take it a step further and have employees use an online time clock, where hours are entered via the internet, so time can typically be entered via a phone, ipad, computer, or any device where internet is available. An online time clock allows pay information to be directly imported from the internet into the payroll system, eliminating the need to gather the file from the time clock. As with nearly any business process, using the right payroll software or payroll service will greatly affect payroll processes. Finding the right system for your business is key to simplifying payroll.
Stephanie Elsen is the marketing manager at Red Wing Software, a payroll and accounting software developer since 1979. Red Wing Software’s CenterPoint Payroll meets the payroll processing needs of growing businesses. CenterPoint Payroll is accessible as a cloud-based or locally installed payroll system.
Low-cost 401(k) with transparent pricing
Sign up for an affordable and easy-to-manage 401(k).
Article ByMargarette Jung
Margarette Jung is a former Head of Marketing at Human Interest.