5 Tips for Streamlining Payroll Operations

March 7, 2017 Zuman

Even though payroll is one of the most essential services a company provides to its employees, it is often one of the most complex. Your payroll department may feel like it is constantly overwhelmed with processing. Using technology to streamline payroll operations can make a significant improvement. Here are some tips to refine how your team handles payroll:

1. Determine employee classifications and how workers will be paid

It's important to assess your employee classifications regularly because regulations may change. Whether you employ full- or part-time workers or independent contractors, they need to be properly classified to avoid compliance issues and fines. Unlike employees, you do not need to withhold taxes for contractors. If you're unsure about how to classify workers, an accountant or attorney can reduce confusion. 

Proper classifications help you determine how to compensate employees, whether through salaries or hourly wages. If employees work different hours each pay period, you need to have a solution that accounts for these variations. Hourly data needs to be accurate so you pay your employees the right amount. 

2. Choose a stronger software platform

Automation can significantly improve payroll operations because it reduces the room for manual errors and saves your payroll department time. If your team has struggled with payroll for years, it may be time to look at how to streamline the process. If errors are a regular occurrence, software can create a more uniform procedure. 

A quality software platform has employee-facing features that allow your staff to manage their personal benefits. Without a user-friendly system, employees are less likely to enter their hours in a timely fashion. Having an integrated system that allows workers to have one login to enter hours, view pay stubs, request time off and check other benefits makes it much easier for employees to access their information. In particular, requesting vacation time is a hassle for many employees, and after they request it, it may be difficult for managers to keep track of the time-off schedule. The right software solution remedies this issue.

3. Improve record keeping

Having more information on hand helps you catch errors before they spiral out of control. Keeping all records in the same spot improves visibility into your payroll platform, making it easier for the payroll department to stay on top of everything. Maintaining better records and submitting payroll taxes every month helps you stay organized during tax season. It may be beneficial to implement a system of employee identification numbers to find data. 

4. Make sure your payroll system is scalable

If your company is a startup, it's likely your original payroll system won't be effective when you ramp up your recruitment efforts. Payroll is much easier when you have only a handful of employees, but it gets more complicated as you add new workers. You may need to consider outsourcing, but that may be practical for only a certain amount of time. Technology offers scalability so your system grows with your company. 

5. Fix problems as quickly as possible

It's nearly impossible to complete this step without having enhanced visibility into your payroll operations. With visibility, you can remedy errors as soon as they come up. If there's an issue with payroll taxes or inaccurate hours, it needs to be repaired as soon as someone catches it. If the IRS informs you that you owe money, pay as quickly as possible. 

Ultimately, payroll should not interfere with you running the business. Streamlining your processes make it easier for you to focus on other areas. 

 

 

About the Author

Zuman

Zuman is the premium solution for HR, payroll, benefits administration delivering superior control, lower risk, and enhanced employee engagement for growing companies.

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