As the year wraps up for many businesses, payroll is just as busy getting their numbers in order and making sure everything is up to date for a fresh start to the new year. To make sure the new fiscal period is a good one, here are some common problems that happen with payroll, and how you can avoid them.
Over or Under?
- Misclassifying Employees - A common problem that will cause a domino effect of penalties in your business. Make sure you determine whether someone is a contractor (1099) or an employee (W-2) so they receive the correct payment.
- Miscalculating Pay - There are a number of ways that miscalculating pay can happen but ensuring the numbers are double-checked will greatly increase the chance of having the numbers correct.
- Poor Payroll Process - Payroll has many processes within it that can be done with a computer nowadays but many still are doing this by hand as well as leaving it to the last minute.
What Can I Do?
While there are many problems that can arise within payroll and cause catastrophic damage within your business, here are a few tips you can follow to avoid this.
- Stay Ahead - Having everything organized and checking to make sure everything is in order before year end can not only make sure you have a worry free year, but can give you ample time to sort out any problems that arise.
- Stay Aware - Make sure your payroll department is aware of any changes to the legislation and any other rules that may affect the way payroll functions. Over the pandemic there having been a few changes and many people are just getting back to a regular work environment so......
- Stay Updated - Sometimes it is not human error but it technological. Many features are now a part of payroll and many companies do not invest enough in their payroll department so much of the work is done inefficiently. Having the latest payroll software ensures that payroll processes are streamlined and the department can focus on other tasks. You can also collaborate.
As Technology Advances
As mentioned above, payroll technology is advancing and many are still not aware of the functionalities that can help you offload work and create efficiency in the workplace.
- Payroll Integration With Other Platforms - Payroll can now be integrated with many features, such as invoice, so that a collaborative process can be achieved to allow payment through global means. This greatly reduces the amount of time it takes to calculate any foreign regulations to get payments done efficiently
- On-Demand Pay - Companies who serve hourly employees can have them access their earned wages as a self service. This not only means potentially easing financial burdens of their staff, but also creating a more trusting work environment, increasing retention
- Payroll AI - Critical errors can be greatly reduced by utilizing AI technology for data management. This ensures payroll is in line with federal regulations and within the markets estimated ranges. This data can also be accessed to determine tax brackets and identify financial data gaps quickly, without being a detriment to work quality.
With all the potential problems that can happen with payroll, the best thing to do is to keep up to date with your payroll provider and make sure all protocols and updates are accounted for. You can also benefit by investing in the latest payroll software for less headaches in the future. For all your payroll questions and concerns please click here to speak with a BAASS expert.