Whether they’re just starting out or well established, all small businesses have to deal with payroll issues.
These include taxes and deductions, calculating wages and hours worked, determining the appropriate amount of sick pay and vacation time owed to an employee, and ensuring that employees are paid at least minimum wage for all work performed.
And let’s not forget about payroll errors such as rounding up instead of down when calculating overtime rates.
all these can lead to a lot of confusion, frustration, and even resentment among your staff members if you don’t handle them properly. Here are four ways to avoid common mistakes in managing your company’s payroll.
1. How to Get the Right Information from Your Employees
If your employees aren’t providing you with all the information you need to calculate their wages, you may be making mistakes.
The start of each year is an excellent time to sit down with your staff and review their employment terms so that there are no surprises later on when it’s time to do payroll.
If an employee has agreed to work part-time hours, they understand what this means and how their wages will be calculated. Also, get them to give you an updated copy of their resume or curriculum vitae (CV) so that you can review their educational background and work history with them.
2. How to Avoid Mistakes in Payroll Calculations
Having a vast knowledge of payment transactions for each employee is the first essential thing. This makes you hardly skip any pay.
A pay stub is a critical tool for this. The practice of sending employees their pay stubs electronically or uploading them to an intranet site where they can access them is becoming more popular than past methods of mailing the information.
Employees can seamlessly develop their pay stubs within seconds. With an online paystub generator, there are clear instructions on filling the form and downloading it before printing. Pay stubs capture information on not only payments but also taxes and other deductions. These documents are essential for a manager when preparing the payroll as every detail is accurate.
3. How to Keep Track of Hours Worked
Keeping track of the hours your employees put in each day is one of the most challenging tasks. Some companies use paper timesheets (even though they are out-of-date,) while others adopt electronic time clocks to help calculate hours worked.
Another way you can make this easier for yourself is by asking employees to fill out a timesheet each week, either in writing or via a spreadsheet. This can provide you with an accurate record of hours worked and ensure that employees are being paid appropriately for all time spent on the job.
4. The Importance of Tracking Time
Tracking time is one of the most hectic tasks for a manager. Some companies use paper timesheets (even though they are out-of-date,) while others adopt electronic time clocks to help calculate hours worked.
There are also many workforce solutions available today that can provide you with various ways to track your workers’ attendance throughout the day.
Tracking time through software enables companies to monitor not only employees’ work hours but also their commuting time (i.e., travel between job sites,) meal breaks, and even personal leave.
Keeping close track of your workers’ attendance can be invaluable for audits and inspections by the government or other agencies. For example, if an auditor comes in to review your payroll records, they will want to see evidence that employees are logging in and out of their system.
It’s fundamental to clearly understand how your employees want their earnings paid and what they expect from you as an employer.
It can be difficult, but the first step is preparing for it by getting all necessary information upfront so that there are no surprises later on when it comes time to calculate payroll. You may also find yourself spending minimal time figuring paychecks if you cut down on errors. Using tools such as pay stubs can be beneficial.