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7 Tips for Better Payroll Management

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Managing payroll can be problematic for many businesses. Although it should be a simple and efficient process, for many smaller companies this is not always the case.

In the early stages of a business, it can even be a manual process that works well for a handful of employees. However, as new employees join and the company grows, the manual methods of time tracking, tracking and reporting can quickly become overwhelming.

Tips for Better Payroll Management

Although every business has its own payroll requirements, there are certain steps that apply to almost every business.

Every business can benefit from an improved payroll process. But knowing exactly what to change or implement can often be challenging. Arbitrary changes or simply installing new software are not the solution.

For your payroll system improvements to be truly effective, you need to look at your overall process, the technology you use, and the best practices to implement.

Seven Easy ways to Improve your Payroll

Although every business has its own payroll requirements, there are certain steps that apply to almost every business.

Taking the time to plan and implement strategic changes and improvements will prove to be a valuable investment for you and your team.

Below are seven ways to immediately improve your existing payroll process:

Align or combine your different pay schedules

Many companies have different wage and salary plans, e.g. monthly paydays for management and weekly or biweekly pay periods for hourly employees. While this may make sense in some respects, in practice it can lead to payroll errors.

“Minimizing payroll cycles can help eliminate duplication of multiple processes, allowing the payroll department to operate more efficiently,” says Tiffany Washington, owner/founder of Washington Accounting Services. "To maximize efficiency, all types of employees should be paid on the same pay schedule (weekly, bi-weekly, or monthly). This allows payroll to focus on one task at a time. It is much easier to maintain just one pay schedule instead of three. Additionally This reduces the risk of errors in payroll accounting."

2. Optimize your payroll system

A great payroll software package can be problematic if, for example, it doesn't work with your company's accounting system. And a variety of systems for recording, tracking, entering and processing employee hours, etc. can lead to a variety of "pain points" - steps where mistakes are often made or data is lost.

Simplifying, consolidating or streamlining your existing systems is an effective way to improve your overall payroll process. By reviewing all the steps involved and taking the time to analyze the process from a high-level perspective, you and your team can find ways to optimize the way you work.

3. Update your payroll software

Upgrading your payroll software can quickly streamline payroll processing in your company. With newer, state-of-the-art payroll technologies, you can significantly reduce the time spent processing payroll while ensuring greater accuracy in data entry and processing. However, keep in mind that a computer program alone cannot solve all of your process problems.

4. Opt for paperless payroll

Paperless payroll is a direct result of improved technology and can speed up your payroll process. If you're like most companies, you're already looking for ways to protect the environment, reduce costs, and ensure the security of your company's data. One way to achieve this is with paperless payroll.

Eliminating timecards or timesheets, physical paychecks, and paper pay stubs can be a big step in this direction. Implementing an online portal system for your employees not only eliminates the majority of paper, but the majority of employees prefer to receive their check stubs and payroll information electronically. Done right, adopting paperless payroll is a win-win for everyone involved.

5. Regular training and further education

Continuing education and training is critical for businesses, and this is especially true for human resources and payroll professionals. Payroll has never been a static profession, but is dynamic and constantly evolving. Changes in technology, available tools and services, and regulations require payroll professionals to constantly stay up to date.

The role of the HR manager is constantly expanding and evolving in many ways as business changes, technology advances and the demands on HR departments change. Ongoing training - whether formal or self-organized - is essential for the successful HR manager.

6. Stay current on state and federal tax requirements

It cannot be overstated how important it is for businesses to stay up to date on the countless rules and regulations of the IRS and other government agencies. The potential costs to businesses that fail to meet deadlines or fail to submit certain forms can be devastating, especially for smaller businesses. Filing employment tax documents is a business necessity, but it doesn't have to be such a costly burden.

Make it a mandatory part of your ongoing processes to review and be aware of your state and federal payroll, employee and tax regulations and changes. By staying fully informed and up to date, you and your employees will avoid a host of costly mistakes and delays.

7. Outsource your payroll

If you, as a small business owner, don't have the time or resources to invest in a new payroll system or update an older one, outsourcing to a professional full-service payroll company can be a strategic and cost-effective option.

One of the major trends in corporate payroll processing is the outsourcing of these functions to a payroll services provider such as IceHrm. This is an important trend among businesses large and small, as many are finding that the cost savings far outweigh the investments.

Forty-seven percent of U.S. companies reported outsourcing their payroll, according to a recently released study by staffing firm Robert Half and the Financial Executives Research Foundation, the research arm of Financial Executives International.

Larger companies are more likely to outsource payroll, with the survey finding that 73% of companies with revenues of $5 billion or more have outsourced this function. Outsourcing of tax returns also increased to 42% in 2014, up from 30% in 2013.

Implement these practical tips to refine your payroll procedures. For a comprehensive solution, consider IceHrm an ally in optimizing payroll management for success.

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