Running a business is no easy feat. You're constantly juggling the needs of your company with the needs of your employees; properly striking a balance is the only way to help your business thrive. When you're trying to do the best for your business and your employees, the last thing you want to worry about is navigating the complicated maze of payroll, including liability, taxation and overtime laws. Seek solace by automating critical systems with an all-inclusive solution: payroll software. Follow these five steps to set up a comprehensive payroll software system that takes the worry of paychecks off your plate and lets you focus on more important tasks, like running your business.
- Know Your Responsibilities
As a business owner, you bear the responsibility of employee compensation. Your employees are being paid for their work, not to double-check yours. You need to make sure the payments you're issuing are correct for each employee and the services he or she has provided. You must know which account the money is coming from, which accounts it's going to and make sure you have the funds readily available.
Fortunately, most payroll software options have these responsibilities integrated into their systems. Every business is different, so you should double-check the needs of your company and your employees, and then make sure the payroll software you choose covers all of them.
Integrating payroll software with your financial accounting software and/or ERP software is a smart way to keep all your critical business systems on the same platform and to make sure that relevant members of your team are always on the same page. Your payroll software and the other HR technologies you use should be integrated with a streamlined cloud-based ERP platform.
- Connect With The IRS
Before you even accept your first employee application, you need to register your business with the IRS. You need an Employer Identification Number (EIN), and you must fill out an SS-4 form to get it. This may be done online or by phone. Make sure you submit this paperwork right away, because you need to give the IRS time to process the forms and issue your EIN. Don't hire any employees without it – doing so could spell trouble for your business.
- Check Up On Your Employees' Records
The onboarding process for new employees is chaotic, and it's easy for paperwork to fall through the cracks. Before you implement new payroll software, you need the proper forms for each of your employees. Make sure you have a W-4 and an I-9 for every employee, and that each form is properly filled out. Any incomplete documentation must be immediately remedied so your payroll processing tasks don't cut into your productivity – or your profitability. (Government regulations require that your documentation is complete and updated; noncompliance results in fines and penalties.)
- Classify Your Employees
Your employees are categorized based on the duties they perform and their schedules. Clearly, you know the difference between part-time and full-time employees, but you also need to make sure you're indicating those who are independent contractors, sub-contractors and consultants.
Federal and state governments have different regulations when it comes to employee classification. You also need to cooperate with exemption rules, which vary from state to state and between state and federal levels.
Payroll software may not be able to categorize your employees for you (it's still just software, after all!), but it is certainly able to take it from there. Once you've established which employees are part-time, full-time or "other" (contractors, consultants), the software takes it from there. A comprehensive solution should be able to calculate exemptions and steer you through payroll processing. Make sure you have your payroll software integrated into your ERP system so all your critical business information stays consistent and accessible across multiple platforms.
- Learn The Relevant Employment Tax Information
"Ignorance of the law is no excuse." You need to make sure you're operating under the right tax guidelines, that you're following the rules and that you're compliant with the most updated government requirements.
Since you're issuing the payment, you're responsible for withholding taxes (for employees). You need to deduct the appropriate amount from each employee's check, document it for their records, deposit them to the proper accounts and report the transaction to the government.
State and federal laws differ when it comes to income taxes. You need to make sure you're operating under your state's laws and complying with federal laws. Take into account Social Security, Medicare, federal & state income, federal & state unemployment and local taxes.
Improper taxation falls on your shoulders, not your employees'. But, navigating tax laws is complicated and frustrating. Most payroll software has this information built in, so by automating your payroll processing tasks, you don't need to worry about learning the tax laws and how to operate within them.
Don't let payroll processing cut into your business's productivity. Utilize smart payroll software to eliminate the potential hassles of mundane – yet critically important – tasks, like payroll. You've got a business to run. Let comprehensive payroll software handle employee compensation.
Find out how automating your payroll processing returns valuable time to your busy schedule. Delegate your payroll software implementation to the experts who keep your business running and help you thrive. Contact SMB Suite at 888.525.6398 or click the link below!