As a business owner, you wear many hats. From marketing and sales to human resources and accounting, there’s a lot on your plate. One area that you can’t afford to overlook is payroll. Your employees expect to be paid on time and in full, so it’s important to have a handle on payroll management if you want to keep your staff happy and performing.
Here are some tips to help you stay organised with everything payroll and avoid any unwanted surprises.
Learn what your obligations are
As an employer, you need to be aware of all of the legislation that goes with paying staff. This includes things like deducting tax and national insurance in the correct way and making sure employees are enrolled on any pension schemes you have.
If you don’t know where to start, the government website is a good place to look for guidance.
Stay up to date with changes
The tax and benefits system is always changing, so it’s important to keep on top of any new developments that could affect your business. This might include changes to the national minimum wage or the introduction of new pension schemes. Make a point of checking information regularly as incorrect payments to HMRC can result in costly fines.
Create a process for your payroll
The first step in managing payroll is finding an effective system and making sure you stick to it.
Decide when you’re going to process payroll and make sure you do it consistently. If you process payroll weekly, do it at the same time each week. If you process biweekly, choose a day or two that works for you and stick to it.
Keep a list of who you need to interact with in order to ensure you have all of the information you need. This might include your accountant, bookkeeper, software provider, and any other relevant contacts.
Make sure you have your process documented.
Consistency is key when it comes to managing payroll.
Holidays and sickness are inevitable at some stage so having your process written down means this task can be delegated to other staff if you are absent.
Track Employee Hours Accurately
Another important aspect of managing payroll is tracking how many hours your employees are working. This means having a time tracking system in place so you can see exactly how many hours staff need to be paid for. There are many time-tracking software programs available that can make this task easier. Or, you might ask employees to fill in a timesheet each week. Bear in mind you will need to check this information before calculating pay though.
Whichever system you choose, make sure it’s one that your employees can use easily so there’s no confusion about how their hours should be recorded.
Calculate Overtime Carefully
If your employees are eligible for overtime pay, be careful when calculating their hours. The last thing you want is to overpay or underpay an employee because of a mistake in the calculation. Many time-tracking software programs have built-in features for calculating overtime, which can help prevent errors.
Payroll mistakes can be costly, so it’s worth taking the time to get it right.
Keep Detailed Records
In addition to tracking employee hours, it’s also important to keep detailed records of other information related to payrolls such as holiday entitlement days, sick days, and withholdings. This will help you stay organised and ensure that everyone gets paid correctly.
Employee records can be kept electronically or on paper; just make sure they’re stored in a safe place where they won’t get lost or damaged.
Keep Your Employees Informed
One final tip for managing payroll successfully is to keep your employees informed about what’s going on with their pay. If there are any changes in the deduction amounts or pay rates, let them know in advance so there are no surprises come payday. It’s best practice to do this in writing so you have a paper trail of keeping employees informed.
Employees who feel like they’re in the dark about their pay are more likely to become disgruntled, so good communication is essential for keeping your team happy and productive.
Check-in with your team regularly
Since your employees are the ones getting paid (or not), it’s important to check in with them on a regular basis to make sure everything is running smoothly from their end. Ask them if they’re receiving their pay on time and in the correct amount. If they have any questions or concerns, make sure you address them right away.
It’s also a good idea to let your employees know when you’ll be processing payroll so they can be prepared if there are any changes or issues.
Get help if you need it
There’s a lot to think about when it comes to payroll, so it’s understandable if you feel like you need some extra support. If this is the case, there are plenty of software applications and services that can make life easier. Alternatively, you could outsource your payroll to a specialist company.
Whatever route you decide to go down, make sure you do your research to find a solution that best suits your business needs.