Resources: 10 Mistakes that Most People Make
Factors that Make a Payroll Preparation Easier
The work that goes into the preparation of the payroll can be so much that a small business might find itself severely challenged in that department. It is not something that can be done quickly or without much organization. Payrolls also have a time sensitivity clause in the sense that they need to be ready if the employees are to be paid in that month, and you cannot afford to delay their payments. You, therefore, need to make certain arrangements that shall make it easier for you to work on them.
You need to ensure the business has tax ID. When you incorporate the business, you will get an employer identification number. If you haven’t yet, you need to make the necessary arrangements.
Another way to make it easier is to give them salaries. This is usually easier to manage than hourly wages. It entails less work than the burden of having to count working hours for each employee.
You need to open a payroll account, exclusive to this function. This will ensure accuracy in your calculations and allocation of funds, as well as timely payments. It also helps in auditing, since everything is organized and well documented.
You need to see to it that you pay taxes in time. Payroll taxes tend to get overlooked, which usually results in a huge penalty when it is discovered. You, therefore, need to pay them on time and get receipts for those transactions. You may find yourself in need of such proof in future cases.
You can arrange for a pay stub generator. This tool ensures you have an easier time tracking payrolls for your employees. It also automatically generates the payrolls for each employee. Such records can then be acquired and stored in the most convenient manner by an individual; in hard or soft copy. This will prove that payment was disbursed, as per the order.
You can also extend tax-free benefits to your employees. There is usually the idea that small business should not think of giving such incentives s they are seen to be costly. But when you time them to coincide with a pay review, you will make it easy. This way, you will not affect an already running payroll system. This is also a faster method that will save you money. These benefits boost the morale of employees.
You can also think of outsourcing such duties. This applies for those businesses that are so busy they cannot find time to do this, but can afford to spare some funds for it. You will also save a lot when you avoid getting a permanent employee for this. You will have it professionally done, and not worry about the extra payments.