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Payroll management can be a complex, convoluted, and confusing process, even for those who deal with it regularly. Handling payroll can be a costly drain on a business if it’s not done effectively. Whether you just started running payroll or have been managing it for years, there is always room to improve. In this guide, we’ll examine the aspects of payroll management and discuss some strategies and solutions to save time, money, and hassle.
For a FREE personalized payroll management consultation, contact Horizon Payroll today. In this 30-minute call you’ll speak to one of our experts and we will help you determine the best options for your payroll needs.
Payroll management is the processes by which a business manages its payroll. This includes everything from tracking salaries, hourly wages, deductions, employee benefits, payment processing, and tax compliance.
It is essential for business owners to know the ins and outs of its laws and requirements. Payroll management can eat up a lot of time, especially for small businesses- estimates show that, on average, 35 percent of an HR team’s time is spent managing the payroll of its employees and correcting errors on payroll records.
On the surface, payroll management may seem as simple as processing payroll every other week. In reality, payroll management is a multifaceted process, covering a variety of aspects, including calculating pay, keeping up-to-date with employee data, and staying on top of the latest laws and regulations regarding taxes and employment to ensure business compliance. All these aspects take up a considerable amount of time and resources for the average HR team. On average, over 100 hours of time is spent yearly for every 25 employees a business has.
Government regulations and laws surrounding payroll practices often require businesses to collect and store an enormous amount of data for each employee. This data includes:
- Worker Classifications
- Social Security Information
- Benefit Enrollment
- Employee Payroll Deductions
- Pay Rates
- Accrued PTO
- Hours Worked
- And More
It also includes more personal employee details like their names, addresses, birthdates, job titles, and dozens of other data points that must be tracked, updated, and maintained by the business. Collecting and updating this data is one of the most significant contributors to the staggering amount of time most companies spend managing their payroll.
Every pay period, businesses, both small and large, must calculate the total wages earned by employees on their payroll (known as gross pay) and then remove any applicable taxes, benefits, and contributions to retirement accounts. The resulting amount, net pay, is the total amount that each employee will receive on their paycheck. It is important to remember that each employee may have different hourly or salary rates, hours worked, tax situations, and benefit enrollments.
Staying on top of local and federal regulations and laws regarding taxes is one of the most critical aspects of payroll management. Businesses are required to accurately withhold and report taxes to the government, either annually or quarterly, and they are mandated to maintain their tax compliance with every paycheck. This includes staying on top of changing deductions for employees, tracking Social Security and Medicare withholdings, and monitoring changing laws to ensure they are integrated into the payroll process.
At a minimum, the federal government requires every business to keep and maintain accurate payroll records for three years, no matter the size. However, some states mandate that these records be kept for longer than that. For example, New York requires its businesses to hold onto payroll data for six years and Illinois for five. In general, many companies opt to hold onto employee records for seven years to ensure they meet all federal, state, and local requirements. The time it takes to store, log, file, and track these records plays a part in the time and effort a company spends on payroll each year.
Generally, most businesses can choose how to pay their employees, whether that means by check, direct deposit, or pay card. However, some states have laws and regulations concerning the specifics. Regardless of the method, it’s critical that employees are paid according to their agreement, on time, and correctly, for many reasons. Beyond the emotional and financial stress caused by lost wages, different states have different penalties, but not many favor the employer in the case of late or missing payment for hours worked. Effective payroll management helps avoid these kinds of potential trouble spots and ensures that the company is on top of keeping its staff taken care of.
Effective payroll management is vital to getting your employees paid on time, accurately, and securely. It also can provide your business with peace of mind that everything is running smoothly and there are no errors in compliance, payment, etc. Not to mention, a well-kept payroll keeps your employees happy and your business’s reputation and financial stability in check!
Horizon Payroll has helped thousands of clients to streamline their payroll processes to help them save time and money. Schedule a consultation with us today!
Due to the sheer amount and variance of information that needs to be tracked, calculated, and stored, payroll management can be a complex, intricate, and time-consuming process. Every organization has its own set of strategies to handle payroll processing, but there are several common tips, tricks, and methods that businesses follow to save time and money on this essential element of their operations. Modern companies often opt for automated digital payroll tracking software to simplify information gathering and strive for transparency in the payroll process between the organization and its employees. Also, a significant number of businesses work with payroll management companies to take care of the hassle for them.
Modern-day payroll software has largely eliminated the need for complex spreadsheets, timecards, and punch clocks. Automating the payroll management process often results in significant savings, both financially and labor-wise. These automated systems also help eliminate mistakes made when processing payroll data, preventing costly errors resulting in lost wages and incorrect tax withholdings. Additionally, most services auto-generate reports after every pay period, making updating employee information a breeze.
In recent years, digital time tracking methods have far and away eclipsed traditional methods of staying on top of employee time. Time tracking software provides serious advantages for both employees and their organizations, including more accurate record-keeping, more straightforward payroll processing, and convenience when clocking in and out. As more and more companies switch to time tracking software, it’s become evident that its implementation is a fantastic way to improve the payroll management process.
The penalties for failing to pay taxes on time and accurately can be severe and are never worth the hassle. Taking the time to stay current on laws and regulations at both the state and federal levels can ensure that your business is withholding the correct amount from each employee’s paycheck in deductions, including Social Security, Medicare, and standard taxes. This includes staying informed on unemployment taxes, local taxes, and keeping updated on changes to employee tax due to relocation, change in status, or wage changes.
Maintaining tax compliance is a critical aspect of payroll management. It can only be correctly done if you stay informed about changes to tax procedures that affect your business and its employees.
Confusion and problems with payroll can often be caused by an employer providing unclear or difficult access to payroll information. This can lead to tax issues, contractors confusing themselves for employees and vice versa, and a general lack of understanding of an employee’s place in the payroll processing system.
Instead, employees should be clearly informed about how the payroll process works, how wages are calculated, how their status is classified, and many other factors that directly relate to them. Post this information in a visible spot, provide each employee with a copy, and regularly update it to ensure everyone is on the same page. Utilizing an online payroll platform will also make it easier for employees to access this information.
If your HR team isn’t directly involved in your payroll system, you’re missing out on a massive boost to your business efficiency. A significant amount of payroll data, such as wages, hours worked, benefits, deductions, and personal information like names, addresses, and other tax-related data, is already collected and maintained by HR. This means your HR department is often able to increase efficiency, saving both time and money, by utilizing this data more effectively within your business operations.
Payro is a solution for cash-flow positive businesses that need a flexible solution for covering payroll when cash is tight. This innovative financing option allows businesses to borrow money to cover their payroll costs with short-term (28 days), low-cost financing. With Payro, companies with inconsistent, but positive cash flow, now have a safety net that allows them to make payroll with a short-term loan at a low-interest rate. Businesses can be approved in as quick as 48-hours, with same-day funding available from there.
An up-to-date and managed payroll calendar effectively communicates to employees when they should expect to be paid, when timecards or punches are due, and other critical information regarding payroll and their responsibilities within the organization. Additionally, a payroll calendar helps keep the payroll management staff on top of deadlines and planning for upcoming tasks. Most automated payroll systems can generate a calendar based on the information provided to help make this process easier.
Every company may have slightly different needs, but there are a few best practices to keep in mind when creating and maintaining your payroll calendar:
Show every pay period for the upcoming year on your calendar. This will head many employee questions off at the pass and help you plan for timeframes that may lag or need extra attention from the team.
Color code important dates like holidays to make them stand out well ahead of time.
Create a reusable template for your calendar to save time and effort every year.
Provide a copy of the calendar to all management staff for distribution. This keeps all staff on the same page throughout the calendar year.
Often, the time, effort, and cost of processing payroll can be avoided by trusting your needs to a proven payroll service provider, like Horizon Payroll. Expert payroll management services can provide your organization with all the management tools and solutions it needs to effectively process payroll or manage it for you.
Hiring a payroll management expert is often the preferred solution for businesses seeking a simpler way to pay their employees accurately and on time. In the United States, 39 percent of companies have opted to outsource their payroll processing entirely, while 43 percent outsource their payroll tax responsibilities. If you are looking to outsource your payroll management, give our experts a call at 1(888) 434-8244 for a free consultation.
As stated previously, an efficient and effective payroll system can benefit your business by keeping your employees happy, your business’s financials stable, and reflecting your company’s reputation as a whole! Also, the importance of staying tax compliant and reducing errors on financial statements is at play. An efficient payroll system is critical to running your business smoothly!
Even minor errors in payroll processes can lead to incorrect paychecks, either hurting the employee’s compensation or costing the company unnecessary expenses; both of which can lead to conflict in the work environment. Studies show that nearly half of all employees will begin looking for another job after just two payroll errors! Keep your company on track and accurate with calculated and professional payroll management.
Through our automated payroll solutions, our clients can enjoy the benefit of knowing that their payroll has been calculated and sorted correctly by industry-leading software. This automation reduces the risk of human error, as well as saving your business valuable time by doing the paperwork for you!
Speaking of human error, an automated payroll system can also help your business stay compliant with ever-changing tax regulations. Forget the headache and effort of keeping up with complex legal paperwork and let our payroll solutions work for you!
Horizon's vast library of payroll and HR resources serves to help business owners get the most out of their workforce while providing a healthy and supportive work environment.
Below are a couple of frequently asked questions about updating a business’s payroll system. You can also check out a more extensive list of FAQs here.
Automation is a huge help for any employee or HR manager to keep track of tons of payroll information. Businesses are typically tasked with keeping the following employee information on hand:
Tax Withholding Forms
Time and Attendance Records
Total daily or weekly earnings, as well as any overtime earnings
Additional wages, like bonus pay and commissions if applicable
Benefits information and employer contributions
Pay raise documentation
Pay periods for wages paid
Total payroll history
Choosing a payroll management system can be tricky, with many payroll companies out there vying for your business! It’s important to choose a payroll partner that you can trust, as well as picking a software companion that is up to date with your technology standards.
For years, Horizon Payroll has been providing top-rated payroll processing and management services to small and medium sized businesses across the country. Our industry-leading payroll software has helped save countless hours and costs for the business owners we serve, and we believe our proven track record as a payroll service provider speaks for itself. Eliminate the risk, worry, and hassle of managing payroll with our trusted payroll management services.
Our clients range wildly in size and location; we provide proven strategies and solutions for the payroll management process for organizations with 1-10,000 employees across the United States. Whether we’re providing payroll software to help a company manage its own payroll or offering our full-service management solutions, you can trust that we’ll dot every I and cross every T to ensure that your payroll is processed accurately and on time, every time.
To get a better understanding of the benefits of payroll management, contact Horizon Payroll today for a free demo of our offerings and a consultation with your organization. We’re excited to work with you to develop the ideal payroll solution!
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