As a business owner, it seems like there’s always a never-ending list of tasks for you to take care of. Whether it’s managing inventory, hiring and firing employees, or talking to investors, your life seems to be one endlessly full Google Calendar.
One of the more onerous tasks that a new business owner has to take on is that of payroll. Understanding payroll basics is by no means an easy task. Getting together everything you need to execute payroll and then making sure that you pay everyone the correct amount, to the last cent, is quite a feat.
In this article, we’ll help you understand some important payroll principles and how you can leverage the latest technology to make payroll easier for you.
Use Direct Deposit
The first thing to consider is that you should be using payroll software that supports direct deposit. Gone are the days when employees would wait for a check in the mail that they have to go to the bank and deposit. If you want to keep your employees happy, then you need to make sure that you’re minimizing their inconvenience by paying them through direct deposit.
What’s more, direct deposit is far easier for you to process as well. You won’t need to print and mail multiple checks every pay period (which also helps the environment!). Finally, you also get to keep an electronic trail of all executed payments, which will be useful in the event that a pay dispute ever arises.
Simply put, there’s no reason why you wouldn’t want to use direct deposit technology.
Gather Documentation Beforehand
The way that most payroll systems work today is that you will need to enter your employee’s information beforehand so that the system can calculate the appropriate amount of money to withhold in taxes.
This is why it’s crucial that you obtain all of the necessary documentation for each employee beforehand. Get W-2s filled out so that you know how much withholdings each employee is claiming.
Use Pay Stub Software
Last but not least, make sure that you’re using software to create a pay stub. Pay stubs are important documentation — just because you’re moving to direct deposit doesn’t mean you shouldn’t still have an archive of every pay stub to record executed payments.
Your employees will also expect to receive pay stubs so that they can see how their salary, hourly wage, commission, or other compensation structure work together in order to affix the sum of money they are due.
Know Your Payroll Basics
There you have it — now that you know these key payroll basics, you’re all ready to start implementing modern technology in your payroll process. Remember that there are lots of different software options out there, so be sure to take your time and shop around before settling on any one tool.
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