Every firm irrespective of its size has employees and there will be an accounting record to manage their absences, salaries, and deductions. Payroll is a necessary operation to be managed well in business even if it does not contribute directly to the growth and success of the organization. Overall, the payroll process looks simple and manageable as it is nothing but calculating employee working hours and handing out the paychecks. In reality, it is much more complex and complicated with employee labor laws and the company’s policies.
Payroll services get complicated by increasing the size of the organization. Accounting and payroll services go hand in hand for a company to calculate its success. The typical services done for accounting and payroll are writing down cashbooks, accounting the list of purchases and expenses, accounting of income, preparation of tax returns and its submission, writing a detailed report of employee earnings and deductions, calculating taxes of employees, and final tax assessment.
Payroll processing should be done on time to maintain the reputation of the company which in turn ensures the financial stability of the business. Also, accurate payroll processing is necessary to stay compliant with state and federal laws. If your current payroll processing is struggling, it is time to change ways to achieve accounting payroll success.
Let’s look at 6 things that can be done to achieve success in accounting payroll services.
Go digital, ditch paper:
Going paperless is the foremost step a company has to follow to survive in the digital age. It saves time, reduces redundancy, organizes documents well, does automatic backups, brings data security, and reduces the risk of error. Doing payroll online is more affordable than buying tons of paper. Online payroll processing is environment-friendly and it also reduces the number of working hours.
The chance of human error is considerably reduced by going digital. Data entry in payroll processing should be accurate as small mistakes will result in costly errors for employee salaries.
The online payroll process is less time-consuming than manual processing. This will result in giving employees enough time to concentrate on other core operations. Online payroll processing is an efficient system as it ensures the organization meets deadlines without delay.
Establish a Clear payroll policy
The complaints that come from employees regarding payroll are often due to misunderstanding of the company payroll system. Organizations should put out clear and transparent payroll policies to avoid misunderstandings and mistakes.
Employees should be involved in understanding payroll policies and how employees are classified. It is the organization’s responsibility to explain the company’s payroll regulations in full, as well as how salaries are computed.
Make a brief to employees on how absences can lead to a reduction in salaries and the types of expenses that are eligible for reimbursement. Give details to employees on how overtime hours are calculated and paid. Transparency comes with regular communication and it helps to curb confusion in the organization.
Set a consistent payment schedule
Every organization has employees working in different capacities where some are freelancers, some are on a temporary or part-time basis and rest are full-time employees.
The pay schedule differs from freelancers to full-time employees. Some are paid every week and some are paid fortnightly and others are paid monthly. There is a definite downside to running payroll processing at different times as it takes more time to draw p analysis and reports for each group.
It is better to create a uniform organization-wide payroll processing schedule to minimize errors and save time and effort. Duplication of data is greatly reduced with uniform payroll and improves the visibility of profits. So pick a payroll schedule that suits your organization and that aligns with the labor laws of your state.
Understanding tax laws
The complicated process of payroll gets more complex with tax calculation. Inquires that are most received by the payroll department are related to tax calculation.
It is because the miscalculation of taxes will lead to penalties and tax laws keep changing and updating every year. Have a complete understanding of the rules and regulations of tax laws to avoid missing deadlines and paying fines.
To avoid miscalculations, keep up with state and federal tax requirements and incorporate them into payroll accounting software. Compliance with updated laws is a must to save time, money, and resources for an organization as opposed to resources spent in correcting the mistakes.
Invest in good payroll software
If you are keen on in-house payroll processing, it is wise to invest in efficient payroll software. It is a good investment for small-scale businesses that are keen on expanding.
Good payroll software makes it easy to calculate taxes and salaries after entering the required details. Convert hours of manual work into easy data entry with payroll management software.
Advanced payroll software can integrate other accounting operations and relevant office software into it. Installing payroll software also helps the organization by stopping fraudulent actions from taking place.
Integration of employee attendance, tax calculation and accounting in single software makes it easy to calculate the paychecks. Having all the information in one place is convenient to perform payroll processing easily.
Conduct payroll audit
If your organization faces regular complaints from employees regarding payroll, the wise decision is to understand that something in the payroll system is wrong and not working for you. Frequent audits will help to look for processes that need attention and fix payroll mistakes. Workflow analysis will give easier access to identify problems, isolate them and fix them.
Make payroll audit part of operations routine and not a process that comes into the limelight when you get complaints. Revisit each step in the payroll process. Avoid confusion and simplify the policies for employees to understand. Implement valuable feedback you receive and remove payroll processing steps that are necessary to achieve success in payroll services.
If your in-house payroll pressing hits a dead end, consider outsourcing your payroll accounting services. Choose an outsourced service that suits your needs and budget.
I’m currently working as a Charted Accountant with a Payroll Outsourcing Company. I have a great passion for outsourced accounting solutions. In the previous couple of years, I have worked with big and small clients across numerous continents. I have a keen interest in accounts payable outsourcing, BPO outsourcing, outsource finance, sales tax outsourcing, outsourcing bookkeeping, offshore Back office services, etc.