Understanding Payroll and Avoiding Errors : Our Guide
Staying on top of your company’s payroll should be one of your responsibilities as the business owner. Doing so ensures that everyone gets compensated for the hard work they put into your company. However, there may be times when you make mistakes with payroll. It can lead to your employees’ mistrust, underproductivity, and possible legal entanglements. Fortunately, you have the opportunity to avoid any payroll errors by getting to know them and finding practical solutions.
This article will discuss four common payroll errors that you may encounter in your company. Take this as a starting point to better manage your finances and maintain your healthy, professional relationship with your employees.
Error #1: Miscalculating Employees’ Actual Time Spent Working
Remember—your business pays by the hour, and employees depend on this system to keep their financial stability. Miscalculating the actual time they spend on work and not paying them enough can ruin your reputation as a company. That’s why you need to be detail-oriented about your employees’ time ins and outs to ensure you don’t miss anything, especially over time.
Another critical detail about miscalculating employees’ actual time spent at work includes their undertime. For instance, you may be unknowingly spending money on absent employees, leading to your business’s financial instability and loss of assets.
Avoid any employee log complications by having automated attendance systems. You can also cross-reference these records with your employees’ time cards to validate and ensure everyone is justly compensated.
Error #2: Misclassifying Employees Statuses and Compensation Packages
One of the trickiest things about running a company with many employees is with their statuses. For instance, you may think that some of the people you hire are all independent contractors. However, you later learn that they are interns who don’t need any compensation because you will be “paying” them in academic credits.
These status and compensation complications are why you need to have a state-of-the-art solution to record all employee details and merge them with payroll services to avoid confusion. Fortunately, you can consult with a Quickbooks expert who can provide you with user-friendly databases to organize your employees and their respective payrolls. It ensures that everyone gets their salary and you don’t make any costly mispayments!
Error #3: Forgetting About Cash Flow Management and Sales Tax Filling
You may be dedicated to maintaining your employees’ payroll, but what about your business’s financial status? You may be behind on loans and sales tax filling, affecting your capability to keep all your employees paid. That’s why you should look to not only improving your payroll services but your entire business accounting system. That way, you can stay profitable, compliant, and successful!
Error #4: Sticking to Paper-Based, Traditional Payroll Services
Many businesses believe that just because they have yet to witness any errors with their payroll services means they don’t need to change it. However, that’s a misconception because traditional, paper-based business accounting can lead to bookkeeping and tax filling inconsistencies. Modern-day companies, like yours, should invest in modern solutions, such as online payroll services, to ensure that you don’t fall into the same mistakes that traditional business accountants back in the day did!
Conclusion
Payroll mistakes are bound to happen if you don’t find effective ways to avoid them. Fortunately, you now have a better understanding of critical errors to avoid and can access solutions to keep your business running and healthily financed. Invest in modern payroll services today!
Are you looking for online payroll services in New York for your company? Consult with us at Totally Booked, your dedicated team of bookkeeping professionals. We can offer you the best services to manage your employees’ payroll and keep everyone happily financed! Acquire our services to avoid getting into any costly payroll and business accounting errors!