When you run a business, payroll is a vital aspect of your accounting or HR department and needs to be done carefully. You have to ensure that you pay employees on time and include applicable taxes. Here’s some advice to make sure your payroll services are run smoothly.

Do:

Create a budget.

You’ll need a budget that outlines the number of employees, their classifications (hourly, salary, independent contractor, etc.), the paygrade for each employee, and considerations like taxes, overtime, and benefits. Outline your annual caps for raises and determine how often your employees will be paid.

Most employees prefer to be paid weekly, but the fees incurred for each batch of payments -- check fees, processing fees, and direct deposit fees -- can make this problematic. Biweekly or monthly payments may be best, but these costs should be included in the budget, too.

Use software.

Software like QuickBooks® streamlines payroll services and reduces the likelihood of mistakes. The technology keeps personal information safe, allows you to track payroll expenses, and often works in tandem with existing business software, like attendance systems. It also makes most of the calculations for you, eliminating human error and giving accurate payments.

Don’t: 

Forget to check timesheets.

Before each payday, check each employee’s timesheet. This ensures you’re paying everyone for all of their hours worked and can calculate overtime if necessary.

It also prevents you from paying out for a day they missed. Payroll software often includes a feature that lets you view each employee’s timesheet and compare it to the hours they’re being paid for.

Underpay or pay late.

Underpaying employees can have large consequences later on, even if you weren’t aware of the discrepancy and it’s only a few cents. Employees that have been underpaid have the right to pursue legal action against your business to recover lost wages.

This can lead to you paying them more and covering court fees and fines, so double- and triple-check all the information before sending checks out. You should also avoid paying late to help employees maintain morale and quality of work or loyalty to your business.

Managing payroll for your business can be burdensome. Wilson, Rea, Beckel & Associates, CPAs, LLC, in Pagosa Springs, CO, is one of the largest and most experienced firms in the Four Corners area. With over 16 years of experience, these CPAs offer comprehensive accounting and payroll services, including QuickBooks training and assistance. Learn more about how they can benefit your business online, or call (970) 731-1040 to schedule a consultation.