Two paycheck problems: According to the American Payroll Association, that’s all it takes for half of U.S. workers to throw in the towel on a job.
At enterprise companies, pay issues are virtually unheard of. But small companies can’t afford to hire reams of accountants, nor can many survive multiple employees turning over in a short time frame.
If you’re a small business leader, you have to put a premium on your payroll operations. Here’s how to do it:
1. Make sure it’s mobile.
Most small businesses understand they need to have a mobile-friendly website. But if there’s one group who needs on-the-go access to your company even more than your customers, it’s your team.
Don’t let a minor issue or out-of-office period snowball into a payroll problem. Payroll software that works on mobile can be critical if you’re out for a conference or waiting on a replacement for your office computer.
2. Skip the spreadsheets.
For multiple reasons, cloud-based payroll platforms make more sense than spreadsheets. Not only do payroll sheets get messy, but they’re more time consuming to use and prone to errors than dedicated software.
Use electronic timecards and labor management systems to track employees’ hours. Some sync up with payroll tools, making it easy to keep tabs on employees’ pay for the period and year.
3. Set up routines.
The only payroll routine employees care about is when their checks are cut. But you know there’s a lot more to the process: Every pay period, you need to verify hours worked, calculate withholdings, update your books, and make transfers. And inevitably, there are questions to answer and mistyped account numbers to deal with.
Those tasks are too important to be done on a whim. Don’t wait until you get a call from your bookkeeper to start crunching the numbers. Set calendar reminders, and use automation where you can. You can set payroll to auto-pay, just as you can your utility bills.
4. Default to direct deposit.
Cutting paper checks costs more than you might think. Bank of America estimates that a business check costs somewhere between $4 and $20, given the cost of the check itself, shipping, and employee time. Even across a few dozen team members, that could add up to hundreds of extra dollars per pay period.
Unless employees expressly ask to be paid differently, default to direct deposit. Digital transfers are not only cheaper, but also more secure than paper checks. For employees without bank accounts, payroll cards are also good options.
5. Treat every season as tax season.
Tax season is stressful. But if you track your labor expenses clearly, collect 1099s as you should, file quarterly tax estimates on time, and complete W-2s accurately, you’ll find that taxes become a lot less scary.
Now, that doesn’t mean you should spend every waking minute fretting about the taxman. But do keep your payroll software up to date, and do be sure to keep a list of important tax deadlines on file.
Few, if any, small business owners find payroll to be a fun or fulfilling part of entrepreneurship. But it has to get done, at least if you want to keep employees around for longer than two pay periods. Don’t let outdated tools or old-fashioned processes make payroll harder than it has to be.