When a business is just getting started it is important to be mindful of unnecessary expenses. Things such as lavish graphic design, luxury office space, and leadership training are among a few of the things new businesses can afford to cut out. Good payroll software is not among one of those things. Messing up payroll means more than just having unhappy employees; in some cases you’ll be expected to pay fees and fines to the government. Here are three ways you can mess up your payroll by not using a software to streamline the process.
Not Paying Accurate Taxes
Paying taxes takes a lot of payroll knowledge. You’ll need to know the local payroll tax rates for where each individual employee lives as well as state and federal tax information. Recording those wages and accurately paying them is a big part of running a smooth payroll. If you fail to pay the correct amount of taxes the government will hold you (the business) accountable.
Transposing Labor Hours
Depending on your timekeeping method this can either be extremely easy, or extremely hard to do. If you’re tracking time on spreadsheets or adding up paper time cards you can easily transpose, or miscalculate labor hours. If your company uses an electronic time and attendance program streamlining labor hours into payroll should be less prone for error. If you’re currently lacking a method for tracking labor and are curious as to how much your business could save by using a software, you can find out here.
You aren’t Properly Calculating Overtime Pay
Overtime rate calculations can vary from business to business, but once your business chooses their overtime rate calculation it needs to be a standard that everyone’s overtime is paid out that way. One way to go about standardizing this is to use a software that can automatically calculate employees overtime. This ensures that everyone is being paid fairly for their time worked.
Every point listed here can end up costing your business time and money. Not to mention if you fail to set up your payroll correctly from the start that will become a huge mess of liability. The best way to avoid these common mistakes is to do your research and make sure you have a software you can trust.