Best Payroll Practices For YOUR Small Business

When running a small business, optimizing payroll is typically far from the top priority, but implementing the best payroll practices can save your business essential time and resources. Whether you’re a business owner who handles payroll or if you have a payroll manager, it’s critical that you follow these best practices to improve your payroll efficiency and business as a whole.

ENSURE THAT YOU CLASSIFY EMPLOYEES CORRECTLY

Your business needs to meet the IRS’s Department of Labor’s required payroll document deadlines. Otherwise, your business can face costly fines.

Some important tax information that you need to submit includes but is not limited to: 

• 940s
• 941s
• 943s
• 944s
• W-3’s 
• 1099-NEC
• 1096

You can set reminders for yourself to notify you of upcoming deadlines, or you can set up an automate payroll that automatically submits documents to align with due dates. The last thing your business needs is to waste money on avoidable fines, so staying on top of government deadlines is crucial.

KEEP IT SIMPLE

Often, the simplest solution is the best solution, and this is especially the case when it comes to payroll.

Handling payroll can seem complex and overwhelming, but you can implement a simple, repeatable strategy in order to stay on top of it.

For example, you can use direct deposits rather than physical paper checks to streamline and simplify the process. Direct deposits are also easy to track, making your payroll reporting much easier.

AUTOMATE YOUR PAYROLL SYSTEM

Because your payroll process is something you’ll have to repeat weekly, bi-weekly or monthly, automating procedures will make your life much easier. Many different payroll software solutions can automate the process, and, as discussed earlier, this will also help you avoid missing deadlines.

ASK FOR EMPLOYEE FEEDBACK

One way you can improve almost any facet of your business, including payroll, is by using employee surveys. Even if you think your payroll process runs smoothly, your employees may have a different perspective that can help you improve the process.

ORGANIZE AND PROTECT YOUR DATA

Whether you use physical files or have digitized your data, you need to keep it organized to avoid future headaches.

If you fail to stay organized, you'll have to work much harder to organize everything the last second when a deadline approaches.

Additionally, if you use digital files, you need to keep them as secure as possible. Fortunately, cloud-based data solutions usually offer strong protection.

OUTSOURCE YOUR PAYROLL

In addition to these best practices, it’s important to note that your best course of action for your payroll could be outsourcing the task entirely. At Chaliff & Associates, our certified public accountants can take the frustration and stress out of payroll so that you can focus on other areas of your small business. If your small business needs assistance with accounting, bookkeeping, and payroll, we encourage you to request a complimentary consultation with our accounting experts.

Let us take care of the numbers. You have a business to grow.