Did you know the IRS penalizes one out of every three businesses for payroll errors? That’s an average of $845 in penalties per business owner, per year?
Getting payroll right can be a big headache for small business owners, yet traditional payroll services are often designed with larger businesses in mind, businesses who choose to outsource the entire function. These services often come bundled with add-ons that small businesses don’t need like HR capabilities, which can end up costing more.
So what are your options? Here are four surefire ways to simplify your payroll process.
Use a Time Tracking System
Whether you have hourly-based workers or need to track paid time off, accurately tracking your employee’s time for payroll purposes is a must. But it’s surprisingly easy to get in a pickle with this one. Manually checking for mistakes, dealing with late timesheets, and complicated pay rates for overtime, vacation, or medical leave can be a pain.
If this sounds like you, then it’s time to invest in a time tracking system and automate the entire process. You’ll find that time tracking capabilities are built into most online accounting software which in turn is fully-integrated with the software’s payroll. Alternatively you can opt for a standalone tool like TSheets (which lets employees track time via their mobile devices and quickly syncs with popular payroll software) or Clockware (which integrates with more than 250 payroll systems).
The bottom line – if you want to reduce payroll errors, get your time tracking process under control. A fully-automated time tracking system can reduce errors by 75 percent.
Pay by Direct Deposit
Eliminate costly paper checks and delays in employee payments with direct deposit. And, because all your payroll reports can be accessed electronically you’ll also cut back on paperwork and shoebox record-keeping. Direct deposit is built-in to many online accounting tools and is typically included in the same monthly subscription fee that you pay for your regular accounting services.
File Taxes Electronically
It’s your obligation to file quarterly and yearly payroll taxes. Whether you work with an outsource payroll provider or process payroll through your accounting software, take advantage of electronic filing. This can reduce the manual steps involved in printing and mailing forms and help avoid costly IRS penalties.
Take Advantage of Small Business Friendly Payroll Tools and Apps
In addition to the full-service cloud-based accounting tools like Xero, FreshBooks, etc. there are a number of point solutions that take a lot of the legwork out of payroll management. RUN Powered by ADP Mobile Payroll is an online payroll application specifically designed for small business. It’s actually designed for mobile devices and is simple to understand but is also feature-rich, with tools that let you calculate earnings, deductions, and taxes, and more.
Another option is Snap Payroll by Intuit, a free online tool that calculates pay and any deductions right from within a web browser or via a free app. The great joy of Snap is that you don’t need to wade through spreadsheets or regulations; the tool does it for you based on laws in your state.
Read more about these and other payroll apps, in Business News Daily’s 4 Tools to Simplify Payroll.