Employers have one of the most important tasks: managing payroll. It can be difficult to ensure that payroll processing is accurate. This guide will give you all the information that you need to ensure accurate payroll processing within your business.

Payroll Processing – Why It’s Important

It is crucial to have a smooth payroll processing system in place so that employees are paid on time and your business fulfills its legal obligations.

Paying employees late can lead to serious problems for your company in the short- and long-term. This is not something you want to do for employees. They are entitled to receive their full wages on time and in full every pay cycle.

Payroll compliance should be a top priority for anyone managing payroll

Many businesses are having compliance issues, including misclassifying employees, failing to report payroll taxes, miscalculating withholdings, and other problems. Organizations that violate FLSA (Fair Labor Standards Act), overtime laws, and recordkeeping may face serious consequences.

Every payroll cycle can be a disaster. Inaccuracies can lead to unhappy employees, and compliance violations that could result in fines or penalties.

Payroll processing can be a time-saving, accurate process that can help your business.

Advantages:

• Happy employees
• Compliance with tax
• Streamlined bookkeeping
• Simplified pay runs
• There are less chances of being sued for FLSA violations
• Accounting accuracy has been improved
• Manual calculations take less time
• All businesses can set up payroll processing to autopilot. This allows them to be confident that everything is in order.
• Gerber Poultry is an excellent example of the importance and value of payroll processing.

Gerber Poultry is a medium-sized business with over 500 employees. It is average in size. Safety at work and food safety were priorities for the company because of its industry. The payroll department was not as efficient. To verify deductions, the company used spreadsheets. Manual reporting was also done.

This caused repeated payroll errors that eventually led to slowing down operations and HR bottlenecks.

After taking the time to learn the importance of payroll processing, Gerby Poultry witnessed a turnaround within the department. The company saved ten hours per Semaine on payroll processing and ensured that employees were paid on time.

These are quick tips to help you improve your payroll processing

These are some simple steps that you can start now to improve your payroll system. These tips are easy to follow even for novices.

Tip #1: Use modern payroll software

Assess your current payroll system. If it isn’t, you will need to immediately change it.

Payroll software is essential for payroll processing success. The best tools automate manual tasks and guarantee accuracy for each pay cycle. These tools include time tracking, accounting integrations, and employee benefits administration.

Gusto is our number one choice, despite the many options available

Gusto is used by more than 100,000 businesses for their payroll. Gusto can be used for both payroll and human resources. It is compatible with most companies. Gusto is an excellent choice for those who are new to payroll software.

It costs only $45 per monthly. The platform can be accessed from anywhere and will process your payroll in minutes. Gusto makes it easy to automate payroll processing.

The software can be used to simplify your hiring and onboarding processes. Gusto allows you to administer and manage employee benefits.

If this solution isn’t for you, no problem. Check out our guide to the top online services for businesses. No matter what industry you are in, this list has something to offer everyone.

Tip #2: Use employee self-service tools

Modern payroll solutions offer many benefits, such as employee self-service options. This will instantly take the pressure off of your shoulders and allow you to save time in your payroll and HR departments.

Take into account your current process for employees who have questions about payroll. For basic information such as updating an employee’s address, this process can be done via phone, email, or in-person at payroll.

This is not only annoying for the staff, but it also creates bottlenecks in HR. This is also inefficient for the whole operation. This is especially true for remote workers, field service workers, or staff who work irregular hours and need to be contacted at all times.

Online payroll systems like Gusto enable employees to set up their login information and manage preferences.

Employees can access their paytubs and update their addresses without having to contact you or other HR personnel. They also have the ability to access their tax forms at the end of each year.

The self-service portals for employees are accessible 24 hours a days, 7 days a semaine. Access to any form you request doesn’t have to wait for Monday morning.

Tip #3: Automate Payroll Taxes and Filings

As mentioned, payroll tax is an important part of processing payroll. This area is prone to errors by businesses, particularly when it comes to manual calculations.

The taxes you have to pay will depend on many factors such as where you live and the type of employee. Businesses are also required to pay local and state taxes. FITA (Federal Insurance Contribution Act), FUTA [Federal Unemployment Tax], FICA (Federal Insurance Contribution Act), medicare, social security taxes, and workers’ compensation are just a few examples.

Gusto automates tax calculation by providing an online payroll program

Gusto automates tax calculations and does everything possible to ensure compliance. Gusto can file your payroll tax reports to the appropriate government agencies so that you don’t have any to do.

This tip will save time and reduce headaches when you calculate taxes manually.

You will no longer be required to complete forms for quarterly and annual reports after making the switch.

Tip #4: Take advantage of Payroll Integrations

Payroll processing must be accurate, compliant, and easy for you and your employees. It is not possible to manually enter numbers using other tools. It can be time-consuming and is vulnerable to human error.

Your data will automatically sync if your payroll system integrates with third-party software tools and tools. This allows for fast and accurate pay runs as well as reporting.

Let’s say you have a third-party accounting software like QuickBooks or Xero. You can sync Gusto with these tools to automate your bookkeeping tasks.

You might use time-tracking software or POS (point of sale) systems to allow employees to clock-in. Gusto can pull data automatically from these tools to process your payroll.

These integrations are easy to set up and can be done automatically so you don’t need to worry about accuracy. Depending on the size of your business, this tip could save you hundreds to even thousands of hours per year.

Strategies for Long-Term Payroll Processing

These tips can be implemented quickly and in one sitting. Another payroll best practices and strategies are also available, although they may take longer to put into practice. 

Strategy #1 – Payroll Audits

Audits should be done even after payroll processing is set up on autopilot to ensure accuracy. A reliable payroll system will make it unlikely that errors such as underpaying employees and miscalculating withholdings occur often. An audit can help you spot mistakes.

Audits can also help you clean up your payroll records and remove ex-employees.

Even if has been used, employees must manually enter information about raises and bonuses. These are just some of the areas you should be aware of when auditing.

At least once per year, payroll audits should be conducted. You can also run the audit quarterly if you discover inefficiencies or errors in your payroll process.

You should not hire biased staff or payroll workers to conduct audits. Audits should be conducted by you or an outside CPA.

Strategy #2: Payroll Reconciliations

Reconciliations of payroll records are important, even though they can be time-consuming. This involves comparing payroll records to your company’s general leadger.

The reconciliation process for both accounting and payroll software will require you to compare each transaction between the two systems. This is not ideal. However, accurate reporting is essential.

It is also a good idea to compare your pay cycles and bank statements. This will enable you to confirm that the pay cycle amount and the amount taken out of your bank account are the same.

It will be much easier to do this if you have separate checking accounts for payroll. It will be much easier to not have to review transactions that aren’t related to payroll processing.

Gusto is an integrated payroll system that makes reconciling easier in the first half. It can integrate with other accounting tools, eliminating the need to manually check each transaction.

A manual review will be performed during the payroll reconciliation process.

3: Evaluate your employee onboarding process

Payroll and Human Resources go hand in hand. You can make sure your company succeeds by improving the onboarding process of new employees.

This partly relates to the employee self-service topic we previously discussed.

It is crucial to establish an employee onboarding process that is easy for both new hires as well as your HR staff. Sending the initial offer letter should be simple. Have them fill out an I-9 form, and then add them to your payroll.

To make it easier for new hires, the onboarding process can be automated to automatically add them to your payroll. After they start working, they are eligible for payment. It is not a good idea to delay payments to new hires. This can set bad precedents for future employment.

Even with payroll and HR software, it can be a tedious task to onboard employees.