Practical Payroll Hacks for SMBs
Payroll can be the messiest part of your month — or, if your payroll system is totally out of whack, it can be a perpetual mess that leaves your accounting and HR teams scrambling and your other workers waiting to be paid. Payroll is tricky for every business, but for some, it can seem downright impossible.
If you are seriously struggling with payroll, you might need to take a step back and employ some of the following hacks. By using advanced payroll tools, developing a better payroll system and trying some uncommon tricks, you might just master payroll in a matter of months.
Every sheet of paper your business uses costs you money. What’s more, every sheet of paper your business uses represents a tree that was cut down for your convenience. By now, you should know that reducing your environmental impact comes with significant cost savings, and the same holds true when you apply going paperless to payroll.
Instead of printing out payroll slips you can send paystubs online through services like National PEO. This reduces the time required for printing and organizing paystubs, and it ensures your business is going greener, which is always good for the brand.
Combine Payment Schedules
When a business is growing, it is always accruing new employees, new contractors, new partnerships etc. that need adding to the payroll. It’s not uncommon for a business to develop different schedules for different types of workers, perhaps once a month for freelancers, every week for hourlies and every fortnight for salaried employees.
Unfortunately, this inconsistency means that HR must constantly juggle different timelines for payment, which requires excessive time and energy to get right. A better idea is to combine your various payment schedules into one identical pattern. As long as workers are getting paid on the right days and in the correct amount, they won’t complain about the shift.
Upgrade Payroll Software
If you are still managing payroll with an Excel spreadsheet, it’s time to upgrade. Modern payroll software has an abundance of features to make the process faster and easier, such as:
- Payroll processing
- Integrated accounting
- Tax calculations and filing
- Payroll records, security and compliance
There are hundreds of online options for payroll management. Some are free, and some are paid. You should investigate your options and choose one that will scale with your business. You should pay attention to things like customer reviews; though happy customers don’t always comment in the same quantities as unhappy customers, you might gain insights into the software by reading reviews.
Get Ahead of Taxes
As a small business owner, you don’t want to put off doing your taxes until April 14. Business taxes are exceedingly complex, and it is best to prepare for tax season well before the end of the financial year. As soon as possible, you should meet with an accountant or financial advisor to understand your tax obligations and develop strategies for maintaining your payroll system in a tax-friendly way. Then, both you and your employees will be ready well before tax season.
Give Tax-free Raises
Speaking of taxes, you might hesitate to reward high-performing employees with raises for fear of how that pay bump will mess up payroll and tax preparations. Instead, you should opt for tax-free fringe benefits, which give employees greater security and career engagement but require no tax payments whatsoever. Some examples of these benefits include:
- Accident and health benefits, to include health savings accounts
- Up to $1,600 in qualified achievement awards
- Adoption assistance
- Up to $5,250 in education assistance
- Employee stock options
- Life insurance coverage
- Lodging and meals
- Retirement planning services
- Transportation benefits
If payroll continues to be a monumental hassle, it might be worthwhile to outsource the process completely. Third-party HR providers, like PEOs, are well-versed in handling payroll, benefits administration, tax preparation and related services, and for a manageable fee, they will take on yours. If HR really isn’t your thing, you can even outsource other services like recruitment and termination, onboarding and training, conflict management and more. Outsourcing is a smart choice if you are struggling at all to keep track of these processes.
Payroll is always going to be a pain, but you can reduce it from excruciating to mildly annoying with the above-listed tips. Because payroll isn’t something you can ignore, the sooner you sort out your payroll problems, the smoother your business will run.