If your small business has employees, then payroll management is an important aspect of your operations. Most small business owners don’t have much experience with this type of bookkeeping, so mistakes are common. Here’s some advice to ensure a smooth payroll service for yourself and your team members.

Do:

Create a schedule.

As you set up your payroll plan, choose a schedule for payments and stick to it. Most small businesses pay their employees every two weeks, every other Friday.

Once you know when employees will be paid, you’ll know when you need to calculate overtime and submit the timecards. Employee morale will remain higher if they know they’ll be paid on time and on a regular schedule.

Outsource to a payroll service.

For most small businesses, keeping their bookkeeping and payroll in-house doesn’t make financial sense. You don’t need to pay someone a full-time salary to handle this job.

This is a highly regulated and detail-oriented part of the business, so you need a professional who understands the latest laws, tax deadlines, and uses the best technology. Outsourcing this to a professional will save you a lot of time, money, and hassle in the long run.

Don’t:

Misclassify employees.

Employees are often misclassified, especially as independent contractors. This mistake could leave you liable for IRS penalties come tax season or even a lawsuit from the employee due to the benefits they were not provided.

You’re supposed to withhold social security and Medicare taxes for employees and provide benefits, such as minimum wage and paid time off. Someone is only self-employed if you don’t control how and when the work is done. Otherwise, they’re either a salaried or hourly employee.

Submit timecards without checking them.

Employees can make mistakes on their timecards. As the employer, it’s your responsibility to ensure they’re paid properly.

Double-check all cards. Look for employees clocking in and clocking out on the same day, with the appropriate breaks taken. If they forgot to clock out one day, for example, talk with them and input the right time manually.

If you want a cost-effective and professional payroll service for your small business, contact Joe Heard, CPA, in Checotah, OK. He has more than 15 years of experience as a Certified Public Accountant and remains up-to-date on the latest IRS regulations and the best technology. Learn more on the firm’s website, or call (918) 473-1492 to schedule a free initial consultation.