Managing small business payroll is a lot more than just paying the right people at the right time. Payroll can help your small business get the job done—and help you avoid losing money. Keep reading for some expert tips on managing an efficient payroll system.
What Does a Small Business Payroll System Entail?
There are a lot of considerations to be made when it comes to payroll, and some of the decisions you make early on will determine whether your payroll system will help or hinder your small business.
The first thing you’ll need to decide is what to handle yourself and what to turn over to a professional. After that, it’s all about keeping organized! You’ll need to keep track of records, benefits, tax payments, and more. Keep reading for a more in-depth guide.
To Do or Not to Do?
While payroll is ultimately your responsibility as the business owner, that doesn’t mean you can’t delegate or outsource parts that you don’t have time for. In fact, 45% of small businesses use a payroll service. Around 20% handle it all in-house.
Evaluate everything that’s on your plate, who you could delegate things to, etc. to determine what the best route would be for you. Every small business’s situation is different, so make sure you’re realistic about what you could handle yourself and what should be handled by a professional.
Keeping Track of It All
Making it as easy as possible for your employees to update their information will go a long way in keeping your records up to date. Whether there’s a paper form for them to fill out or an employee portal via your payroll software, make sure you’re keeping up with every address change, name change, pay change, etc.
In addition to keeping up with employee information, you’ll also need to track your employees’ hours. It doesn’t matter how you choose to track this, just make sure it’s thorough and accurate!
Also, the IRS requires businesses to hold onto employee tax records for at least four years. Depending on the state you live in, there may be additional record-keeping requirements so make sure you’re aware of yours!
You may have heard this term before. “Reconciling” payroll simply means comparing your expected payroll with your actual payroll. You should do this fairly often—before sending out W-2’s at least—but ideally every payroll and before filing quarterly taxes. Try to check your payroll at least two days before running payroll as well.
Small Business Advice You Can Trust
At Banks, Finley, White & Co. we specialize in all things small business. Whether it’s payroll services, tax advice, or general accounting, we have your back! Get in touch with us today to get started.