When you try to run your payroll manually, it takes a long time to get things done. As small business owners know just how important time can be, there is a need to find a way to simplify the payroll process. 

It would allow you to easily calculate payroll taxes for your employees. Although business owners rely on a variety of payroll providers, it could still take at least 5 hours a day to complete payroll processing. To help you save time, we have created the ultimate post to give you some of the best tips to help you simplify your payroll process. Read on to find out how you can make a change.

1. Switch to Direct Deposit

One of the best tips for simplifying the ongoing payroll process for small business owners is switching to direct deposit. In order for the transaction to be made, you would simply require bank account documents from employees. However, your employees should have no issue as it would ensure that they get their wages paid quickly.

Even if you offer cash to your employees, they should have no issue with a direct deposit. You may use your payroll software to make the payment for a small fee. But, it would help you avoid printing and mailing costs. Besides, you would not need to waste any more time cutting checks when you opt for direct deposit.

2. Electronically File Payroll Taxes

Another great tip that you should consider is filing payroll taxes electronically. When you opt for e-filing, you get to save time and minimize expenses. Having to print forms, fill them out, and send them for each period can be frustrating. This is why it’s best to ditch manual filing altogether.

Once you’ve set up e-filing, you’ll be able to automatically withhold payroll taxes and social security from the income earned by each employee. A payroll service will simplify things even further by filling out the forms for you. You’ll be able to sit back and relax while everything is taken care of. 

3. Learn More about Your Payroll Provider

Most modern payroll providers are going all the way to provide the ultimate accounting and taxation tool. Not only do they help you calculate payroll taxes but also sales tax on goods or services provided to customers. It is due to this reason that you should learn more about your payroll provider. Chances are that the payroll software you are using is packed with all types of capabilities including tracking and reports.

If you have a bookkeeper, you can ask for his or her help to take complete advantage of the solution. There is no need to feel intimidated by the features as they could provide all the assistance you need to simplify your small business payroll process. 

You should check to see if your payroll provider offers a tutorial that you can watch to learn more about all available features. Besides, learning more about this tool will familiarize you with payroll processing so that you can quickly get things done. 

4. Create Reminders

To keep up with important payroll dates, you should set reminders. There is just so much that you can remember. Once you have set up e-filing, you’d still have to report the taxes that you have withheld.

and make the right payment. 

Now, you must report the payroll taxes every month, quarter, year, or period to avoid penalties. Therefore, it is in your best interest to set reminders for payroll tax dates. It will ensure that you don’t miss out on anything. Moreover, you should consider changing the pay period structure to ensure easy payroll processing.

5. Opt for Employee Time Entry

Consider using employee-lead time tracking software. It is well worth the investment and helps you save time. The last thing you want is to manually enter work hours for all your employees. As the time clock would be clock-based, your employees would be able to log their hours. It is the perfect option for remote workers. Even though it’s necessary that you double-check the entries to correct them, the time tracking software will prove to be a huge relief for you. 

It is a good idea to check with your payroll processor to find out if the solution you are using has time clock integrations and functions. There are many payroll solutions that offer time tracking functionality. You can also use a third-party time tracking tool and integrate it with your payroll software.

Conclusion

Payroll can be a time-consuming process and one that causes you a fair share of headaches. These tips should get you started on simplifying your small business payroll process. If you desire more comprehensive help with payroll and financial management, consider partnering with an experienced bookkeeping service provider. 

Sound Accounts helps businesses improve productivity through streamlined payroll plans and detailed bookkeeping support. Connect with us today to learn more. 

For more information about small business payroll, check out our frequently asked questions below.

FAQ

How Do You Manage Your Employee Payroll Process?

A great way to manage your employee payroll is by asking each team member to fill out their Form W-4 (Employee Withholding Certificate). The information that your employees provide should be sufficient for their employment. But, you must be aware of periodic changes which would require updates. Regularly review Form W-4 to avoid time-sensitive issues later down the road. It is a good practice to take some time out to review each Form W-4 to ensure that the data points have been properly filled out. Get your workers to update their withholdings to reflect changing benefits, children, and retirement goals.

Next consider switching to direct deposit as this makes life easier for you and gets your employees paid faster.  Use a trusted automated payroll service like QuickBooks Payroll, PayChex, or Gusto to streamline the entire process and keep all information automated and moving. Lastly, for more comprehensive help, partner with a professional bookkeeping service to manage your payroll, tax process, and finances. 

How Can I Improve My Payroll Process?

Managing the payroll process is not easy. While it should be straightforward for small businesses, there is a possibility you might find it problematic. Although a manual process might work if you only have a few employees, you need to improve your payroll process as your business grows.

Here are some tips that will help provide you with the results you’re looking for.

Combine or Align Different Pay Schedules: It is quite common for companies to maintain various pay schedules for hourly employees and management. However, it is likely to result in errors. To prevent multiple processes from being duplicated, you must minimize pay cycles for efficient payroll processing.

Streamline the Payroll Systems: If your payroll software is not in line with the accounting system of your organization, it will cause problems. Similarly, if you have various systems for inputting, tracking, and processing hours worked by employees, it will create pain points. Therefore, it is best to simplify, consolidate, and streamline the existing system to improve the overall process. You can do this by reviewing each step.\

Upgrade the Payroll Software: The next tip that you should consider is upgrading your payroll software. When you upgrade your payroll software, you get to streamline payroll processing. You can leverage the latest technology to decrease the amount of time it takes to process payroll.

Ensure a Paperless Payroll Process: When you opt for improved technology, you get to streamline payroll operations and ensure a paperless environment is created. It allows you to cut costs and go green. Besides, it is about time that you ditched timesheets or time cards.

Train Employees Regularly: To ensure that your payroll process continues to improve, you should regularly train employees. Technological advancements are paving the way for easier payroll processing. Thus, your employees need to know how to keep up.

Stay Informed About Tax Requirements: Both federal and state governments are always changing tax requirements. This is why you need to stay informed to meet compliance standards. You must regularly review the latest tax regulations to stay updated and avoid costly mistakes.

What Are the Basic Steps In The Payroll Process?

Onboard Employees: Firstly, you have to onboard employees and create a list of workers who need to be paid.

Develop a Payroll Policy: The next thing you will need to do is define a payroll policy to ensure standard execution. The policy should cover pay, attendance, leave, and even employee benefits.

Seek Employee Information: You also have to gather employee information such as their full names, addresses, and bank account details. Then, you can validate the information by asking employees to review it for accuracy.

Calculate Payroll: Once you have all the necessary information and have reviewed it, you can calculate your payroll. You will have to use spreadsheets to make these calculations. Fortunately, if you have payroll software, it will handle everything.

Disburse Wages: Next, you must create a salary bank advice statement for directing the bank to disburse the wages.

Pay Statutory Deductions: During payroll processing, you will have to determine all statutory deductions like PT, ESI, TDS, and PF which must be made to the relevant government departments before the deadline.

Provide Tax Computation Sheets and Payslips: Lastly, you will simply need to distribute the tax computation sheets and payslips to your employees. This could be handled using your automated payroll system.