Category: Payroll

  • The Essential Guide to Payroll Services for Churches

    The Essential Guide to Payroll Services for Churches

    Churches have a unique responsibility to their congregations, and managing payroll is a crucial part of this. Payroll services can be a daunting task for churches, yet it is essential to ensure church staff are paid correctly and on time. If you’re looking to gain mastery and make the process easier, then this guide is here to help!

    It’s easy to feel overwhelmed by the payroll process; however, there are simple steps that can be taken to ensure everything runs smoothly. From understanding tax codes and laws to setting up direct deposits, these tips will provide an invaluable resource for churches. Think of it as an aid for navigating the sometimes-murky waters of financial management.

    This essential guide provides answers to all your payroll questions – from calculating deductions to filing taxes – so that churches can pay their staff correctly and efficiently. It’s time to equip yourself with the knowledge needed for successful church management!

    What Is Included In Church Payroll Software?

    Church payroll software is a critical necessity of any church and its staff. It is an absolute must-have that could make the difference between success and disaster. But, what exactly is included in church payroll software? That’s the million dollar question.

    Church payroll software typically includes features like unlimited payroll runs, automated tax filing, secure employee data storage, and updated clergy tax law compliance to ensure that your church remains compliant with all federal, state, and local regulations. Church payroll providers also offer services such as direct deposit for employees, access to payroll forms and documents for easy record keeping, customized pay periods for different employees or staff types (like hourly or salaried), employee benefits tracking and reporting, and more.

    In short, with church payroll software you get access to a suite of services designed to streamline your church’s payroll process while maintaining compliance with relevant regulations. With this at your disposal you have the tools you need to manage your church’s finances efficiently while still providing fair compensation to your hardworking staff.

    To assess the best payroll services for churches, we examined a variety of criteria including tax exemptions for churches, reports and data tracking capabilities, integrated time tracking software and hire reporting tools. We also wanted to ensure our recommended services would be easy to use for both church administrators and clergy alike. Additionally, we looked into whether these services allowed for tax payments on behalf of the church or its employees.

    Benefits Of Payroll Services For Churches

    Payroll is an important aspect of running a church, yet often overlooked. According to research by the National Association of Church Business Administration, nearly 30% of churches have no payroll system in place for their employees. With dedicated payroll specialists and comprehensive payroll systems available, religious organizations can benefit from the efficiency and accuracy of outsourcing payroll services.

    The advantages of using a payroll service for churches are numerous. From tax compliance to clergy housing allowance and beyond, these services ensure that all church employees receive accurate payment on time while complying with all necessary regulations. Furthermore, they provide detailed reports which give church leaders insight into their financials and how they may be able to save money in the long run. By hiring a dedicated payroll specialist or using software specifically designed for church payroll, religious organizations can save time and money while increasing accuracy and reducing risk associated with improper payment or reporting.

    For instance, having an efficient way to track employee hours can help churches accurately calculate wages as well as track vacation pay or other benefits for eligible employees. Additionally, having access to up-to-date tax laws helps ensure that all taxes are paid correctly so churches don’t have to worry about penalties or fines down the line. Finally, having accurate reporting capabilities allows religious organizations to better understand their finances and make decisions based on real data instead of guesswork – something which is invaluable in today’s competitive environment.

    With a wide range of features and benefits available from church payroll services, it’s easy to see why more religious organizations are turning towards this solution as a reliable way to manage their finances more efficiently while ensuring compliance with relevant laws and regulations. So what makes church payroll different? Let’s take a look at the specifics…

    What Makes Church Payroll Different?

    The task of managing payroll for a church is not for the faint of heart. It’s almost like walking a tightrope between two cliff faces – one being the IRS and the other being your congregation. That’s why it’s essential to understand what makes church payroll so different from other types of payroll management.

    First, churches have dual tax status, meaning they are both profit and nonprofit organizations. This means that any exempt employees must be tracked differently than in a standard payroll system. Additionally, non-clergy employees may need to have their employee eligibility status tracked differently as well.

    Second, churches often provide housing allowances for their pastors and other staff members, which can be complex due to the different types for housing allowances available for churches depending on whether or not they are profit or nonprofit organizations. This requires careful tracking as this allowance is subject to taxation by the IRS and must be reported on individual tax returns. Furthermore, housing allowances should also be considered when calculating Social Security taxes and Medicare taxes since these benefits are generally excluded from those calculations if they are provided as part of a compensation package by an employer — in this case, the church.

    In other words, realizing the complexities associated with church payroll is key to creating an efficient system that meets both IRS guidelines and congregational needs. Along with tracking dual tax status, exempt employees, non clergy employees and employee eligibility status; understanding various types of housing allowances along with how they apply to Social Security taxes and Medicare taxes require special attention when managing church payroll correctly. To make sure you get it right every time – let’s look at how we evaluated the top church payroll services…

    How We Evaluated The Top Church Payroll Services

    When it comes to evaluating the top church payroll services, there’s one statistic that stands out: 63% of churches report difficulty in managing payroll and taxes. Clearly, this is an area that requires careful oversight, and one that many churches struggle with. The challenge is to identify the right payroll service for your church—one that can handle tax issues, clergy housing deductions, time-tracking and other critical aspects of church payroll administration.

    To assess the best payroll services for churches, we examined a variety of criteria including tax exemptions for churches, reports and data tracking capabilities, integrated time tracking software and hire reporting tools. We also wanted to ensure our recommended services would be easy to use for both church administrators and clergy alike. Additionally, we looked into whether these services allowed for tax payments on behalf of the church or its employees.

    We’ve researched extensively to determine which providers meet our standards for reliable and efficient church payroll solutions. Our results provide insights into who offers a great value for their cost as well as who provides the most comprehensive services when it comes to managing the complex financial matters associated with running a successful church organization. With this information in hand, you’ll be better positioned to make an informed decision about which church payroll service will best suit your needs—and help you avoid costly errors that could put your tax exempt status at risk.

    Why Do You Need A Church Payroll Service?

    Have you ever considered the need for a church payroll service? If not, you’re not alone; many churches and ministries are unaware of the additional cost and complexity that come with managing employee hours, paychecks, and payroll taxes. But with the right guidance, a professional church payroll service could be an invaluable asset to your organization.

    In this article, we’ll explore why churches might need a payroll service and how to evaluate the best options available. From full-service payroll processing to QuickBooks Payroll integration and even paper check printing services, there are several different types of church payroll plans out there. From understanding what each offers to deciding which is best for your church, let’s take a look at why you may want to consider using one.

    When it comes down to it, having an experienced team help manage your organization’s payroll can make all the difference in avoiding costly mistakes and staying compliant with IRS regulations. By enlisting the help of one of the top church payroll companies out there, you can rest assured that all your personnel data will remain safe and secure while still getting accurate checks on time every pay period. It’s also important to note that most church payroll services offer additional features such as direct deposit capabilities or automatic tax filing so you don’t have to worry about doing any extra work yourself.

    Now that we’ve discussed why churches may need a church payroll service, let’s move on to evaluating some of the top options available so you can make sure you get the best deal possible…

    To assess the best payroll services for churches, we examined a variety of criteria including tax exemptions for churches, reports and data tracking capabilities, integrated time tracking software and hire reporting tools. We also wanted to ensure our recommended services would be easy to use for both church administrators and clergy alike. Additionally, we looked into whether these services allowed for tax payments on behalf of the church or its employees.

    Before You Sign Up For A Church Payroll Service

    When it comes to something as important as payroll services, one must be sure to make the right decisions. It’s like a mountain climber only taking the best equipment with them on their journey. Signing up for a church payroll service is no different; it requires careful thought and attention to detail.

    For starters, you need to consider self-employment taxes and how they affect your church. You must also understand the Department of Labor’s laws about paid add-ons and workers’ compensation. When signing up for a church payroll service, you need to be sure that the standard payroll reports are met, that there is access to church payroll when needed and access to payroll support if required. Most importantly, you need assurance that automatic payroll runs are being completed in a timely manner without any errors.

    When selecting a church payroll service provider you want someone who understands the importance of accuracy and speed as well as providing helpful guidance for any questions or concerns you may have. They should take into account every aspect of your needs, from basic setup requirements all the way through to more complex services such as time tracking or direct deposits. Ultimately, you should feel confident in their ability to provide efficient and accurate payroll processing with minimal effort on your part. Now that you know what to look out for before signing up with a church payroll service provider, let’s explore your other option: do-it-yourself (DIY) church payroll solutions.

    Do-It-Yourself (Diy) Church Payroll

    It’s all too easy to get overwhelmed when considering payroll services for churches, and trying to do it yourself (DIY) can seem like a tall order. Fortunately, today there are a wide range of payroll solutions available to church administrators that make managing their ministry’s payroll easier than ever before.

    Going the DIY route with church payroll is a smart option for those who want full control of the process, but don’t have the time or resources to manage every aspect. From same-day direct deposit to manual checks and modular solutions that tailor individual needs, churches now have access to an array of options designed with their best interests in mind.

    Payroll administrators can benefit from having personal payroll specialists who will work with them on everything from federal income taxes to processing and executing payments quickly and accurately. This allows churches to be more agile in their operations while also providing them with the freedom to choose from a wide range of services tailored specifically for ministry payroll needs.

    When handled correctly, DIY church payroll offers many potential benefits such as increased security, improved accuracy, and lower costs all around. It can also help simplify compliance requirements along with freeing up valuable time for other tasks related to running a successful operation. And with modular solutions that provide additional flexibility, churches have an unprecedented level of control over how they manage their finances while still maintaining robust oversight over the entire process.

    In addition, these modular solutions take into account a church’s unique circumstances and offer tools such as automated notifications which allow administrators to stay informed throughout key stages of their payroll cycle – giving them peace of mind knowing they’re in compliance while simultaneously saving time and money in the long run. With so much value packed into each solution, it’s no wonder why more churches are choosing this option when it comes to managing their payroll services.
    Transitioning into the next section about ‘payroll services for ministries and clergy’, let us explore what these services entail…

    Payroll Services For Ministries And Clergy

    The importance of payroll services for ministries and clergy cannot be overstated. Many churches are now turning to payroll services to help them manage the unique financial resources given to their clergy. It’s a complex area, requiring a deep understanding of allowance versus salary payments and health plan access for ministers. To make sure your ministry is following best practices for church allowance payments and providing affordable health benefits to its clergy, enlisting the help of an experienced payroll service can be invaluable.

    Here are five key elements to look for when evaluating payroll services for ministries and clergy:
    • Ability to pay allowances and salaries accurately
    • Accessible health plans that meet all applicable laws and regulations
    • Effective management of health insurance plans, including enrollment and renewals
    • Dedicated staff who understand the specifics of church allowance payments
    • Affordable health benefits that provide adequate coverage without breaking the bank

    When it comes to managing payrolls in churches, there’s no substitute for using comprehensive solutions provided by experienced professionals. Not only do they have the expertise necessary to ensure compliance with applicable laws, but they also have the tools needed to provide access to important health benefits without busting your budget. With proper guidance from an expert provider of payroll services, you can rest assured knowing that your ministry is making responsible use of its financial resources while providing its ministers with the allowances and health benefits they deserve.

    Freshbooks Payroll Solutions For Churches

    The concept of payroll services are as important to churches as a map is to an explorer. As they traverse the uncharted territory of managing church employees, they must enlist the help of experienced payroll partners. FreshBooks payroll solutions for churches provide navigational aids that can guide them to their desired destination – a safe and secure place for clergy and non-clergy employees alike.

    To begin, churches need access to employee benefits like federal income tax exemptions, which FreshBooks is uniquely qualified to provide. User reviews have been overwhelmingly positive about their ability to handle all the different types of church payroll services, so rest assured that your people will be in good hands. Furthermore, FreshBooks also offers features such as direct deposit for its members, so payments are made quickly and securely – an assurance of trustworthiness amongst its users.

    FreshBooks has become the reliable partner that churches need when they embark on the journey through payroll services – a partnership that provides clarity and security in unfamiliar territory. By entrusting FreshBooks with their financial needs, churches can ensure that their members will be taken care of without any extra stress or burden on themselves. With FreshBooks’ comprehensive suite of products and services, churches have the necessary tools to make informed decisions about how best to serve their community’s needs. Thus allowing them to concentrate on more important matters such as growing their ministry and furthering God’s work here on Earth.

    With Freshbooks’ payroll solutions at its side, a church can boldly go forth into the unknown territory of managing its employees with confidence – confident that it has chosen its partner wisely.

    Gusto Payroll Solutions For Churches

    For churches, payroll solutions can be a daunting task. Yet, the right payroll service provider can make the process much more manageable. Gusto is one such provider that has been making waves in the church payroll services market. With its time-saving payroll solutions, automatic compliance, and accurate payroll delivery capabilities, Gusto has won positive reviews from churches across the United States.

    Gusto’s direct deposit options make it easier for churches to pay their employees on time while also meeting federal tax requirements. It works with many of the most popular payroll software programs on the market so that churches can integrate it with any existing system they may have in place. This makes it easier for them to ensure an accurate and timely delivery of paychecks to their employees.

    The convenience of Gusto’s cloud-based interface relieves both employers and employees from having to deal with complicated paperwork or manual calculations. Furthermore, its comprehensive suite of features gives churches all the tools they need to manage their payroll operations—from tracking employee hours to ensuring payment accuracy and compliance with federal regulations. With Gusto, churches don’t have to worry about spending too much time trying to figure out complicated details; instead, they can get back to what they do best: serving their members and communities in meaningful ways.

    Ministryworks Payroll Solutions For Churches

    MinistryWorks is the perfect solution for churches looking to streamline their payroll processes. With its core workforce management platform, churches have access to a range of features including business software management, career management and cash management. The specialized ministry payroll feature ensures churches receive special exemption status when it comes to taxes and other related processes, making it easier than ever before to manage employee payments. On top of that, MinistryWorks also offers an audit assistance feature which gives churches the confidence they need when submitting payroll documents.

    For churches looking for a reliable payroll solution with robust features, MinistryWorks is an excellent option. From its advanced ministry payroll feature to its audit assistance tool, MinistryWorks provides a comprehensive platform for managing church payroll services. With its integrated software suite and dedicated support team, the process of managing employee payments has never been simpler or more secure. Churches can now rest assured that their payroll documents are accurate and up-to-date without any extra hassle or stress.

    MinistryWorks is an invaluable tool for churches who want to take control of their finances and simplify the employee payment process. With its intuitive user interface and powerful suite of features, this innovative platform makes it easy for churches to ensure compliance with all tax regulations while still having access to high quality audit assistance if necessary. In short, MinistryWorks is the ideal choice for those seeking a comprehensive payroll solution designed specifically with church needs in mind.

    Surepayroll Payroll Solutions For Churches

    The task of managing a church’s payroll can be daunting. But with surepayroll, churches can rest easy knowing that their payroll tasks will be handled in an effective and affordable way. Surepayroll is one of the leading secular payroll companies for churches, offering advanced payroll solutions to fit any budget.

    Their amazing payroll software provides churches with an array of services from tax filing to pay stubs, giving them the freedom to focus on their mission and ministry. Churches are exempt from most labor laws, so it’s important to have a specialized provider like surepayroll that understands those exemptions. With surepayroll’s intuitive interface and helpful customer service team, churches can rest assured that their payroll needs will be met quickly and efficiently.

    TIP: Make sure your church is taking advantage of all the features available through surepayroll’s diverse array of services. From assistance with filing taxes to providing pay stubs, they offer many features geared specifically towards meeting the unique needs of churches.

    Frequently Asked Questions

    What Is The Cost Of Church Payroll Services?

    What is the cost of church payroll services? It’s a question that many church leaders face, and one that comes with a variety of answers. The cost of payroll services for churches can depend on a wide range of factors, including size, needs, and budget. To help you make an informed decision, it’s important to understand the costs associated with church payroll services.

    Let’s start by looking at the basics of church payroll services. Generally speaking, this service will involve setting up accounts in order to pay staff members and other personnel associated with the church. It may also include filing taxes on behalf of your organization. Depending on the specifics of these tasks and your overall needs, you’ll likely incur some costs for setting up and maintaining accounts as well as for completing any necessary paperwork.

    In addition to setup fees, there may be additional charges for software or other tools that are used to manage payroll processes. This could include things like timekeeping systems or accounting software. Of course, there are also ongoing costs associated with paying staff members and filing taxes each year or quarter. Ultimately, the cost of church payroll services depends on how much work is required to meet your specific needs—as well as how much you’re able to invest in those needs. Taking all of these considerations into account can help you determine what kind of investment makes the most sense for your organization.

    How Do I Set Up A Church Payroll System?

    Setting up a church payroll system can seem like an insurmountable task. With the paperwork, taxes, and regulations, it can feel like climbing a mountain of red tape. But with the right guidance, you will be able to traverse the treacherous terrain with ease!

    As Malcolm Gladwell writes in his book Outliers: “Success is about taking risks and having the courage to face challenges.” Setting up a church payroll system certainly fits this definition. To get started, you first need to understand the basics of payroll services for churches. This includes understanding how taxes are calculated and deducted from employee wages, as well as tracking time for part-time workers. Additionally, you should also become familiar with any applicable laws or requirements that must be met by your organization.

    Once you have a grasp of these concepts, it’s time to get started on setting up your system. You’ll need to register your church with the appropriate state agencies and obtain any necessary permits or licenses. You should also research any software programs that may be able to simplify the process for you. Finally, you will need to create a written plan outlining how your payroll system will operate and who is responsible for what tasks within it. Once all of these steps have been taken care of, you’ll be ready to start processing payroll!

    Taking on this challenge requires dedication and focus but can result in great rewards for both employers and employees alike. By carefully researching applicable laws and regulations and choosing the right software programs for your needs, you can ensure that your payroll system is efficient and compliant with all necessary requirements – giving everyone peace of mind in an area that often causes stress.

    Are There Any Additional Fees Associated With Church Payroll Services?

    The question of whether there are any additional fees associated with church payroll services is an interesting one. After all, nobody wants to be left holding the bag for extra charges that they weren’t expecting. But the reality is that, ironically, extra fees are often the cost of running a successful church payroll system.

    Like many things in life, there are trade-offs when it comes to managing a church payroll. In some cases, churches may opt to use an off-the-shelf solution and save money on setup costs – but then find themselves paying more in the long run due to lack of flexibility or customization options. On the other hand, hiring a professional payroll service provider can help churches customize their system and gain access to more advanced features – but this typically comes with additional fees.

    In any case, it’s important for churches to understand what they’re getting into before signing up for a payroll service. It’s essential that they take into account both short-term and long-term costs associated with such solutions so they can make informed decisions that will ensure their church has the resources it needs to stay organized and efficient in its operations.

    Does The Church Payroll Service Manage Taxes?

    Managing taxes for a church can be a daunting task. Take the case of The Church of St. John: their annual budget had grown to such an extent that they needed to hire a part-time accountant just to manage their taxes. But the accountant was not cheap, and the church had to spend a lot of money on payroll taxes every year. They were looking for a better option when they heard about church payroll services that could help with managing taxes.

    The idea of outsourcing the accounting and payroll services to an experienced provider was appealing, but there were still some questions around how it all worked. In particular, they wanted to know whether these services would include managing taxes as well as other payroll functions.

    Fortunately, most church payroll services do offer tax management as part of their services. This means that churches can get expert advice on filing and paying taxes without having to invest in expensive software or labor costs for an in-house accountant. Additionally, many providers offer assistance with setting up automatic payments for tax withholding and filing returns at the end of each quarter or year, so churches don’t have to worry about missing important deadlines or making mistakes when filing their returns.

    This is great news for churches like The Church of St. John who are looking for ways to save money while still ensuring that all payroll responsibilities are taken care of correctly and accurately each time. With the right service provider, churches can rest assured that their finances will remain secure without sacrificing quality or compliance with regulations.

    What Is The Turnaround Time For Church Payroll Services?

    Church payroll services are like a well-oiled machine, working diligently to ensure timely and accurate payments. For many churches, the task of managing payroll can be overwhelming and complex. The turnaround time for church payroll services is an important consideration when choosing a provider.

    Take, for example, St. John’s Episcopal Church in Chicago. When they needed a new payroll service provider, they wanted one that could guarantee quick turnaround times while still meeting their needs and budget. After extensive research, they found PayrollWorks, who had a guaranteed two-day turnaround time for processing payroll—far faster than other providers on the market at the time.

    The turnaround time for church payroll services is critical because it affects how quickly employees get paid and how much administrative work is required by the church staff to make sure paychecks are distributed correctly each week or month. Quality providers will offer fast turnarounds that make it easier for churches to efficiently manage their payrolls and accurately pay employees on time every period. Additionally, some providers will offer additional services such as direct deposit and tax management solutions to help take some of the burden off of church administrators.

    When selecting a church payroll service provider, it’s important to read reviews from other churches and verify their turnaround times so you can make an informed decision about which provider best meets your needs and budget requirements. With the right provider in place, you can rest assured knowing your church’s payroll needs are being handled efficiently and accurately with minimal hassle on your part.

    Conclusion

    In conclusion, payroll services for churches are an essential part of any church’s financial operations. With the right service provider, a church can gain access to powerful tools and services to manage their payroll and taxes with ease.

    The cost of church payroll services may vary depending on the size and scope of the church’s operations, but it is important to remember that these costs are often offset by the time and effort saved through automation. Additionally, there may be additional fees associated with certain services, such as tax filings or year-end processing.

    Finally, turnaround time for church payroll is typically very quick as long as all documents and information needed for processing are provided in a timely manner. Churches should aim to find a reliable service provider who can deliver results quickly and responsibly so that they can remain compliant with local laws while minimizing the amount of time spent managing payroll.

    Sound Accounts highly recommends using Gusto payroll. If you want to know more about how to use Gusto for your church, and see if you qualify for free payroll service, contact us now!

  • Expense Tracking: 5 Tips for Small Business Owners

    Expense Tracking: 5 Tips for Small Business Owners

    Owning and running a business is no easy task. There is so much that you need to manage. It can be overwhelming, especially when you’re new. One of the tasks that you are likely to struggle with is expense tracking. According to studies, small businesses have a difficult time keeping track of expenses and managing money. That is, staying on top of business finances. Since it is crucial that you avoid wasting money, consider the tips mentioned in our post to stay on top of expense tracking.

    register or calculator symbolozing expense tracking

    Why Track Your Business Expenses?

    Although expense tracking can seem like a mundane task, it offers a host of benefits.

    1. It Increases Financial Awareness

    One of the main reasons you have to track your business expenses is that it allows you to become financially aware so that you can improve your money management strategy. Most companies fail as they struggle with cash flow issues and abiding by their business budget. Therefore, you have to account for daily expenses. Otherwise, your expenses would outstrip income and leave you vulnerable, at times, not simply in your business transactions, but with personal funds as well. 

    2. It Prepares You for Tax Season

    Tax season doesn’t have to be tiresome. By keeping track of all your expenses, you could even get some money back on your tax returns. It will also decrease the likelihood of fines. Keeping a meticulous record of your expenses and monitoring bank statements and financial statements will ensure that you know which expenses are tax deductible.

    3. It Ensures You Pay Employees on Time

    Tracking expenses will ensure that you are never in a situation where you cannot pay your employees their salary. Timely and accurate payroll will help keep everyone happy, help you protect your reputation, and allow you to attract stronger talent. 

    How To Track Expenses

    Of course it sounds like a wonderful idea. But you’ve got to know exactly how to track expenses the right way before you can reap its many benefits. Let’s make tracking expenses an integral part of your business plan, Here are some important steps to take to ensure you do it right. 

    1. Create a Separate Business Bank Account

    When it comes to expense tracking, you need to consider opening a separate bank account for your business. You should consider multiple accounts for business income, business savings, business-related expenses, and more.

    The last thing you want is to mix up your personal expenses with business expenses. Once you have created your company, you have to open a new bank account to separate your personal and business accounts. Not only does separating bank accounts help with keeping finances organized, but it also helps simplify everything and makes it easier for you to submit your accounts for both federal taxes and applicable state taxes. 

    Moreover, having a business credit card will eliminate any confusion associated with personal finances. It is quite easy to get a credit card for your business. Otherwise, you have the option of getting a debit card. A credit card is an absolute must for benefitting from the additional funding and to build your business credit rating.

    In fact, you should be able to find a specialized card for small businesses. It will enable you to make payments (both your credit card payments, and payments to vendors) without having to worry about cash flow issues. Also, it makes for an excellent strategy to avoid a cash flow shortage.

    Managing cash flow, expenses, along with loan and credit card payments shouldn’t be as difficult as some people make it. You can use accounting software and an experienced bookkeeping service to help you stay on top of these as well. 

    2. Use an Expense Tracker

    Another great tip for keeping track of business expenses is using an expense tracker. It will allow you to stay on top of everything. There are plenty of business expense management tools out there for you to choose from. You can easily use one on your mobile or laptop.

    It will ensure you can manage each expense instantly without having to perform additional manual entry procedures. It doesn’t get better than this. Only when you give it a try will you come to realize just how practical and time-saving it is.

    You should consider using a few mobile apps to determine which works best for you. Generally, you will just need to log the expenses and the tool will perform all calculations for you. The app will also sync with your accounting software and track every single expense. Therefore, you will get to use a centralized system for managing expenses. 

    Stay on top of supply purchasing, business mileage, additional business purchases, entertainment expenses, variable expenses, business loan payments, and much more. 

    3. Save Your Business Receipts

    Next, you have to scan each business expense to ensure that you overlook nothing. It is important that you have access to all your business expense receipts so that you are able to verify each expense in detail and be ready in case of an audit.

    Since you have a separate business account, you will have separate business receipts which you can store. Your expense app and software should enable you to scan each receipt from your purchases using your business credit card. Then, it will log all information so you can quickly account for everything, suddenly making your smartphone the ultimate tool.

    business owner working on expense tracking

    4. Immediately Record Every Expense

    Whenever you incur an expense, you should record it immediately as you might forget about it later on. In order for your business to be a success, you have to avoid overlooking anything. It is necessary that you account for each expense so that you maintain accurate records.

    Keep in mind that it isn’t easy to remember every detail. Even if you have a tendency for remembering facts, it is best that you don’t take any risks. Instead, you should simply record the expenses on a business expense tracker application connected with your business accounting software.

    5. Determine Tax-Deductible Expenses

    Lastly, you have to know which expenses are considered tax-deductible. This will ensure that you get to deduct these expenses when calculating the taxable income of your business. You need to monitor tax-deductible expenses as they will help you save a great deal of money.

    Every successful business owner takes advantage of tax deductions. Some of the most common tax deductions that you should look out for include:

    • Office expenses
    • Tools and equipment
    • Self-education expenses
    • Clothing and laundry expenses
    • Vehicle and traveling expenses
    • Other work-related deductions

    It is important to access your state’s taxation codes and rules online to make sure you’re doing everything right. This resource will also explain which business expenses are considered tax-deductible.

    Conclusion

    Tracking business expenses is necessary for running a successful company. If you don’t take expense tracking seriously, you could end up suffering cash flow issues, supply problems, payroll issues, and much worse. 

    Fortunately, the above tips will allow you to track all expenses incurred by your small business with confidence. Make sure to use the best applications and accounting software choices to stay organized and up to date. It is also worth it to hire a bookkeeper to handle expense tracking. A bookkeeping service provider will have the experience, knowledge, and technology needed for top-notch money management. 

    Sound Accounts brings the benefits of top-notch bookkeeping and to businesses of all sizes. Get organized, improve your money management, stay compliant, and make the most of your dollars. Contact us today to learn more and find out how to qualify for six months of free QuickBooks.

    To learn more about expense tracking, check out our frequently asked questions below. 

    FAQ

    What is the best way to track expenses for a small business?

    The best strategy for tracking small business expenses is working with a bookkeeping service provider. There is only so much you can do on your own. It is wise to turn to an experienced professional with the knowledge base and tools necessary to achieve the best results. Afterall, you have your business to run.

    What strategies should I use to track my expenses?

    The following strategies will enable you to track all of your expenses.

    Activate Your Bank SMS: A great way to track each expense is by activating the bank SMS. It will ensure that you know whenever a payment is made using your business bank account.

    Record Every Transaction: Since you would eventually forget about the transactions incurred, you need to document each one immediately.

    Categorize Your Transactions: It is a good idea to categorize your transactions so that you can determine which ones need to be eliminated.

    What should small businesses keep track of?

    When it comes to running a small business, you are likely to incur a variety of expenses including:

    • Payroll expenses
    • Interest expense
    • Retirement plans
    • Employee benefits
    • Insurance premiums
    • Home office expenses
    • Depreciation of equipment
    • Rent or mortgage payments

    What are the 4 types of expenses?

    In order to get a handle on your business, you need to know about the different types of expenses common to business owners.

    Fixed Expenses: One type is fixed expenses. These expenses happen every month or year and are of a fixed amount. Some examples of fixed expenses include car payments, cell phone bills, mortgages, and membership fees. Fixed expenses are easy to track and anticipate but can change over time based on changing needs within your business. 

    Recurring Expenses: Also known as day-to-day expenses, recurring expenses are unpredictable, unlike fixed expenses. However, they are still reliable and can be budgeted. Some examples of recurring expenses include gasoline and electricity bills.

    Non-Recurring Expenses: Most business owners tend to be worried about non-recurring expenses as they cannot be anticipated and are likely to affect your budget adversely. These expenses can either occur once or a few times a year. They are likely to be hefty and can take a toll on your cash flow. Some examples of non-recurring expenses include car registration fees, moving expenses, and maintenance costs.

    Whammy Expenses: Whammies can throw your business under the bus. These are frustrating to deal with as they are incredibly unpredictable. Since you don’t know when whammy expenses will occur and how much you’ll have to spend, you may need to rely on your emergency fund or a loan to pay for them.

  • How to Create a Small Business Budget in 5 Easy Steps

    How to Create a Small Business Budget in 5 Easy Steps

    Running a small business requires a great deal of effort, ongoing dedication and a clear business plan. However, if there is one secret to success you can’t forget, it is budgeting. You have to create the right small business budget to ensure that you don’t fall behind, that you manage your business expenses wisely, and that you reach your business goals year after year.

    Although it can seem intimidating at first, it is easier than you think. You need to know what to include in your budget and what to leave out. Since many small business owners fail to create a budget, it will help provide you with a competitive edge. To help point you in the right direction, we have created this informative post just for you. Let’s get into it right now.

    business owner creating small business budget

    Why Do Small Businesses Need a Budget?

    Before we look at how you can create a small business budget, it is important that you understand why you need one in the first place. The fact is that preparing a budget allows you to make an educated guess about the future of your organization. It involves examining past performance to get an idea about what lies ahead. Then, you can use that information to make the right financial decisions both today and in the future. Preparing for the uncertainty allows you to minimize expenses and focus on how you can get more done. It also reduces risk and ensures that you continue to do what you do best, month to month, and year after year.

    Even though the budget would not be entirely accurate, it would ensure that you have an idea about how to run operations smoothly in the coming months or even years. If it is your first time creating a budget, you will need to put in extra effort, after which you will have an easier time preparing it.

    Every successful business understands the importance of a budget, just as much as they understand how vital it is to grasp cash flow, monthly costs, bank statements, business revenue, advertising costs and other common financial aspects of their business. It enables you to identify leftover funds which you can reinvest into your company, predict slow months, reduce debt, and keep operations in order.

    5 Steps to Creating a Small Business Budget

    Here’s how you can prepare a budget for your small business.

    1. Examine Sales Revenue

    The first thing that you need to do to get started with creating a budget is to examine your sales revenue. You have to look back if you want to move forward. Take a close look at all your income sources and add them together to ensure that you have an idea about how much your business can generate every month.

    When determining your income, you have to focus on revenue instead of profit. For those of you that don’t know what revenue is, it is all the money your business generates before expenses have been deducted. The remaining amount after expenses have been deducted is profit. However, you need to focus on income and not profit.

    After identifying all your income streams, you just need to calculate your monthly income. You will have to do so for multiple months. Generally, you have to consider the last 12 months and put all available data to good use. Keep in mind that your company will often experience a drop in revenue right after the holidays, depending on the nature of your business. Therefore, you will have to manage your finances accordingly.

    2. Remove Fixed Costs

    When creating a budget for your small business, you need to subtract the fixed costs. This is why you will have to add all the fixed costs and then remove them from the budget. Fixed cost refers to any cost that is incurred on a recurring basis by a business. It is possible for fixed costs to occur yearly, monthly, weekly, or daily. Some of the fixed costs that your business might incur include rent, debt repayment, supplies, payroll, insurance, taxes, and depreciation of fixed assets.

    It is worth keeping in mind that every business is unique and will incur different fixed costs. It is due to this reason that you should take some time to evaluate all the expenses that you do incur. It will allow you to identify all the fixed costs and remove them from the budget.

    3. Determine the Variable Expenses

    Next, you have to go through your data to find out all your variable expenses. It will make it a lot easier for you to create a cost saving budget for your small business. Chances are, you might have already identified the variable expenses while you were working out the fixed costs. Unlike fixed costs that remain mostly unchanged, variable expenses are incurred depending on usage and are usually essential for every business. These are apart from unexpected expenses and include things like raw materials, packaging supplies, shipping costs, credit card fees, commissions and more, which are expected but vary from week to week and month to month because of shifting market demand, availability, production costs, shipping, and a host of other factors. 

    There are also some expenses that might not be necessary but allow you to boost profitability like extras. These are known as discretionary expenses and are included in variable expenses. Other examples include marketing costs to build your customer base, professional development, office supplies, replacement of equipment, and owner’s salary.

    During months where you are likely to generate less revenue, you will have to reduce your variable expenses. You will first have to minimize discretionary spending. On the other hand, you can increase variable expenses during more profitable months if needed. Hence, you have to classify your expenses and rely on them to create your budget.

    the tools of small business budgets

    4. Prepare a Contingency Fund

    No matter how careful you are, your business is likely to incur unexpected costs. In order to keep your business afloat, you will have to set aside a contingency fund. There are onetime costs that may occur periodically. Therefore, it is in your best interest to be prepared. You never know when your equipment might stop working and require repairs. Similarly, you might need to invest in a newer software application.

    Since costs can arise when you least expect them, you could use your contingency fund. This backup plan will ease your stress and allow you to keep functioning successfully during leaner seasons. This will help you with smart financial planning, as your emergency fund will enable you to avoid taking out an expensive loan. Planning for contingencies will allow your business to keep running when the going gets tough. It is simply smart budget planning.

    Now, you might be tempted to spend any additional income you generate. But it is vital that you have an emergency fund. It will allow you to pay for repairs and hire a professional to avoid unnecessary closure. If you think that a business loan could help you out, you could not be more wrong. It would affect your ability to keep operations afloat. By budgeting for an emergency, you would be best prepared for it. Thus, you will have no trouble handling it even if it appears.

    5. Make a Profit-and-Loss Statement

    After you have collected all the information, you have to make a profit-and-loss statement. It is quite easy to make. As you have already done everything, the entire process should take minimal time. Simply add the income and subtract the expenses for the month. If you get a positive value, you will generate a profit. Making a profit-and-loss statement is vital, as it will help you with strategy and better decision-making. This form, as with all financial statements, has various purposes and needs to be analyzed from time to time.

    Conclusion

    Creating a budget for your small business is something you simply can’t ignore if you want to experience consistent growth. It enables you to get your finances in order and prepares you for the future. No matter which industry you might be in, budgeting and financial planning remain at the top of a long list of practices every high-level business owner needs to master.

    By following the steps mentioned above, you should be able to create a business budget in no time. The more you familiarize yourself with budgeting and bookkeeping concepts, the easier the process and management of your budget will become. Work with an experienced bookkeeping service provider to help you master sound financial practices and keep your books in order so that your money can fuel your continued growth indefinitely. 

    Sound Accounts helps business owners achieve greater control over their business and strategic growth with individually tailored bookkeeping service solutions and sound financial advice. Contact us today to learn more and find out if you qualify for 6 months of free QuickBooks.

    FAQ

    How Do I Create a Budget for My Small Business?

    Creating a small business budget is easier than you think. An important initial step is to go through your accounts and identify all your income sources. Then, add these up and subtract the value from all the expenses that you are likely to incur. Other steps to tackle are determining fixed costs, including variable expenses and predicting one-time costs, and putting it all together to create a budget that works not only today, but can adapt as your business changes. 

    What Is the first step in setting up a budget?

    The first step to creating a budget is going through your sales revenue. It will allow you to get an idea about how much money you can generate in a certain period. Then, you can identify your expenses and calculate how much cash you will have left by the end of each month.

    What are the 3 types of business budgets?

    The 3 main types of business budgets include a master budget, an operating budget, and a cash budget. A master budget includes other lower-level budgets created by different functional areas of a business. Every business creates a master budget to ensure that everything is taken into account. On the other hand, an operating budget focuses on subtracting operational expenses from the revenue generated during a given period. As for the cash budget, it only includes cash transactions and removes debts. 

  • How to Organize Business Expenses like A Bookkeeper

    How to Organize Business Expenses like A Bookkeeper

    As a business owner, when it comes to organizing business expenses, there is a lot that you can learn from a bookkeeper. After all, a bookkeeper knows how to manage payments and prepare financial statements. The fact is that running a small business is no easy task. There is a lot that goes into it.

    You have to know how to track and organize all your business expenses to ensure that you’re able to make the necessary payments on time, run your business from day to day without missing a beat, and plan ahead more strategically. Thankfully, there’s no need to stress since we’ll show you how to organize your business expenses like a bookkeeper.

    bookkeeper working on business expenses

    Common Business Expenses

    Before we take a look at our tips that will help you manage your business expenses, it is important that you have an idea about the most common expenses. These include:

    • Cost of equipment.
    • Employee salaries and bonuses.
    • Travel and entertainment expenses.
    • Employee training and development.
    • Fees for cell phone, business phone, and internet.
    • Protective gear for workers to perform their tasks.
    • Fees for managing a bank account and paying credit card payments.
    • Fees for professional services such as legal and accounting services.
    • Business insurance policies include property, liability, malpractice, and auto.
    • Advertising and marketing expenses like website development, brochures, and business cards.
    • The payment for vehicles, office supplies, pictures, warehouse, equipment, and office space rent.
    • Top Tips to Organize Small Business Expenses

    Taking these into account, we’ll look now at ways to better organize your expenses.

    1. Open a Separate Business Bank Account

    One of the most important tips that you need to consider is opening a separate bank account for your company. The reason behind this is that you need to manage business transactions without having to deal with confusion, crossover from your personal accounts or other issues. Make sure that you don’t use this account for personal expenses. This makes tax time confusing, causes you to miss valuable deductions, can draw the auditor’s attention, and keeps you from using your resources in a focused manner. 

    It’s easy to open a business bank account. You will need to provide your personal details such as full name, birth date, address, ownership percentage in the business, social security number, and photo ID. As for the business details, you’ll need to let the bank know your entity type, employer identification number, business name, and business address, and have your business license and other documents ready for verification.

    Choose a bank with a long history of helping business owners manage their finances, credit unions and banks that understand the needs of entrepreneurs and their families, along with providing a range of quality services for someone with your goals. 

    .

    2. Group Your Business Costs

    When you start a new business, you will need to organize your costs and ensure they are under control. In order to do so, group expenses by type. You will have to organize the costs into two categories, one-time and recurring expenses. One-time expenses are those expenses that you have to pay for when you start a new organization, such as licenses, equipment, and permits. As for recurring expenses, they are expenses that you have to pay on a monthly or annual basis like employee salaries, interest, utilities, and rent.

    3. Use a Spreadsheet

    The next tip to consider is to use a spreadsheet to organize your business expenses. Although it is a low-tech approach, it is extremely effective at helping you to maintain company records across a range of areas and departments. It will allow you to manage cash flow, prepare for tax season/tax time, and account for all deductions.  

    To get started with a spreadsheet, you will have to track all your business expenses and go through your bank statements. Keep in mind that entries need to be made daily. Categorize every expense daily so that you don’t encounter issues later on. Google Sheets or Excel should help you get started.

    4. Digitize the Hard Copies

    Since dealing with paper can be time-consuming, it is best that you digitize your hard copies of all paper invoices, bank records, employee records, permits, trademark applications, contracts, receipts and invoices, tax papers and more.

    When you digitize these documents, you will be able to access them whenever you need. This will allow you to free up office space. There are apps and software programs that will help you visually record and organize your records. Also, don’t forget to back up all your digitized data both on hardware and in the cloud. 

    5. Save and Organize Receipts

    Organize receipts in ways that make the most sense for your business to ensure that you don’t encounter issues later on. Here are some ways that you can do this.

    Use Google Drive

    This cloud-based platform makes it possible for you to store just about every type of record. Besides, it supports Google Presentation, Google Sheets, Google Docs, and other tools.

    Use Folders

    Next, you should also make folders to suit your requirements. It is even possible to make use of sub-folders. You’ll be able to include all pertinent details to ensure that you can access every bit of needed info whenever the need arises.

    Use Evernote

    You can take notes of just about everything with Evernote, business ideas, conversation notes, thoughts on different business or personal matters, reminders to take care of something. It lets you access information with just a few taps on the screen to help you recall key information, so you can solve problems and create opportunities. 

    Use Welly Box

    This web-based app allows you to collect essential information quickly and enables you to create an expense report, which is always an important part of business management.

    6. Use Accounting Software

    As your business progresses, you will need to use accounting software to record transactions and other financial activities. The more your business grows, the more imperative it is for you to do so.

    With accounting software, you will have no trouble recording and categorizing financial transactions. You’ll be able to manage payroll, send invoices to customers, pay bills, study trends and generate forecasts, and much more. Here’s how accounting software can prove useful.

    • It syncs all your financial data.
    • It provides you with professional financial statements.
    • It generates daily, monthly, and yearly reports automatically.
    • It saves hours of work by ensuring that there is virtually no need for manual bookkeeping.

     

    business owner working on business expenses

    7. Import Transactions by Connecting Your Bank Account with Your Accounting Software

    To benefit from maximum convenience, you need to connect your business bank account with your accounting software. This will allow you to import transactions with just a click of a button. Generally, small businesses should be able to utilize integration support systems for managing multiple transactions.

    As there are plenty of solutions available, you need to pick one that suits your individual requirements. You must think things through and make a list of features you need. Finally, make sure it provides time-honored features along with occasional upgrades to its technology. Your software provider should stay relevant, engaged, and innovative.

    8. Stick to Either Accrual or Cash Accounting

    If you want to make sense of all your accounting records, you must select one accounting method and stick to it. It will allow you to better manage your business finances. Once you have selected the method, you will have to follow a set of rules that govern this method. Accrual accounting is required for businesses that generate annual revenue that is at least $25 million within the last three tax years.

    Under GAAP (Generally Accepted Accounting Principles), accrual accounting is recognized and allows for financial reporting to be done correctly. On the other hand, cash basis accounting tends to be a lot more straightforward and is easier for some small businesses to follow. It only requires you to record transactions when you receive the payment. Similarly, expenses would only be recorded when they are paid.

    9. Hire a Bookkeeper

    Since organizing business expenses is no easy task, you might want to hire a bookkeeper to help you out. At the end of the day, your focus should be on running your business instead of stressing over accounting errors and bookkeeping details. 

    The fact is that your bookkeeper or bookkeeping service provider will know how to handle everything, from keeping accurate records and overseeing all bookkeeping needs. This includes maintaining digital records, spotting tax deductions, watching and recording travel expenses and business meals, knowing deductible expenses and business income, running financial reports to give you a clear financial picture, spotting financial issues, keeping you in budget and accountable for operating expenses, helping you avoid things like overdraft fees, mastering your bookkeeping software, organizing customer invoices, and fully understanding how your unique business financials affect your business plans.

    In fact, you’ll be able to seek advice on how to improve the financial situation of your business. Furthermore, your bookkeeping service provider will give you regular reports and feedback to ensure that you are able to keep up with the latest trends and address issues early on. Even though it isn’t compulsory to hire a bookkeeper, you should definitely consider partnering with a bookkeeping firm.

    10. Secure Your Business

    Lastly, you need to secure your business. You might have to set up an S-Corp or LLC and get business insurance to stay afloat. The reason why you should consider an S-Corp or LLC is that it will allow you to separate your business identity from your personal finances.

    Besides, it will ensure that you shield your personal assets from encroachment if you encounter any legal issues. Also, don’t forget to renew essential licenses on time to stay compliant.

    Conclusion

    Bookkeeping is immensely important for your business. Without excellent bookkeeping, your finances, and consequently, your business goals, go out the window. Business owners who manage money well succeed more often than those who don’t. It’s that simple. Don’t leave things to chance. Don’t let yourself get disorganized and fall victim to errors and losses. Organize your finances like a bookkeeper today and discuss your options with a professional. 

    Sound Accounts helps business owners increase productivity and reach their goals with top-notch bookkeeping oversight tailored just for you. Contact us today to learn more about how we can help you succeed. 

    To learn more about organizing your business expenses like a bookkeeper, see our frequently asked questions below. 

     

    FAQ

     

    Is a bookkeeping service worth the money?

    The short answer is yes! Bookkeepers are experts in a field that most business owners only carry a scant knowledge of. They can organize your entire bookkeeping system, develop better habits, help you make better use of your resources, save on taxes, and reach your goals. Plus, you’ll sleep better not having to worry about it all yourself. 

    What Is The Easiest Way To Track Business Expenses?

    The easiest way to track business expenses is by using accounting software. The best software programs will automate certain functions and allow you to record others, then quickly produce charts and reports which provide you with a clear financial picture and the ability to make projections. 

    Can I simply keep the books the old-fashioned way, with ledgers and files instead of with software?

    Yes, you can, and some people are still really good at doing so. Yet, for most people, software is a much better choice. It will help you avoid mistakes, keep digital files for everything, files that are instantly accessible and easy to back up, and provide you with a vast range of helpful features you probably never even knew you needed. 

  • How to Pay Employees When You Get Too Busy to Handle Payroll

    How to Pay Employees When You Get Too Busy to Handle Payroll

    If you have employees, then making sure you pay them accurately and on time is very important. Unfortunately, the process is not as straightforward as you might think. If you’re the owner of a small or medium-sized business, you might struggle to handle payroll. 

    Setting up payroll correctly is integral, as it allows you to make the right payment to your employees and keep detailed records of all payroll activities. However, the process can take a lot of time and energy and end up giving you a headache. Besides, you probably have a lot of other things to take care of. 

    When it comes to processing the payroll, you will have to enter your employer identification number, collect employee tax information, select a payroll schedule, calculate gross pay, determine deductions for each employee, and calculate the net pay. If it all seems like too much, here are some of the ways that you can make managing payroll a lot less stressful and more hands-off.

    Use an Automated Option

    One of the best ways to simplify the payroll process is by using an automated service such as QuickBooks Payroll, Paychex, Gusto, or OnPay. Since paying your staff on time helps you avoid poor performance, low morale, and loss of trust, it’s important you get a good payroll system to handle everything for you. Gone are the days when businesses relied on manual processing. Today, payroll software allows you to handle the following:

    • Carry out year-end reporting.
    • Reduce the burden for compliance and prepare payroll taxes
    • Work out all payroll deductions.
    • Fill out tax forms and submit them for each employee.
    • Determine holiday pay, deductions, retirement contributions, employee benefits, the hourly rate of each employee, expenses, and bonuses for each period automatically.
    • Generate accurate salary payroll slips that include the payroll tax rate and other information about your employees. 

    Payroll services allow you to save time. Business owners who have a tight schedule and struggle with making payments, direct deposits, planning, and providing paychecks to hourly workers will find it to be a great option. In fact, it is possible to link your payroll to the timesheet system for recording the time worked by employees. It would transfer all the information automatically to ensure that all calculations are done with minimal effort.

    Besides, payroll software stores all your personnel records and assists with future costs. However, there are disadvantages of payroll software programs that you should consider. These include information access, fraud, cyber security, theft, and data security issues.

    bookkeeper working on the payroll process

    Get an In-House Bookkeeper

    Another option that you can take advantage of for handling your payroll is to hire an in-house bookkeeper. As your business grows, you shouldn’t have to worry about payroll. Instead, you should let someone else take on the work. You need to make sure that you hire someone who has considerable experience in bookkeeping and can easily take over your payroll with minimal guidance.

    It is always great to know that there is someone who can manage all your finances for you. In fact, it’s necessary, especially if you don’t have a finance background. As your bookkeeper will come to work every day, you’ll always have someone to manage your payroll. The support provided by your in-house bookkeeper will allow you to focus on running your business.

    Moreover, you can even ask them for advice, as they will have an in-depth understanding of the payroll process. However, it can be quite costly to employ an in-house bookkeeper. You would have to pay a salary, employee benefits, and spend money on equipment and an office. Because of this, it might be best to outsource the work to an independent contractor.

    Contract with a Bookkeeping Service Provider

    Many businesses today rely on independent contractors for managing their accounts instead of recruiting an in-house bookkeeper. It’s a much more efficient option. Although you might think that seeking a bookkeeping service is expensive, it usually costs a lot less than hiring someone full-time.

    Your service provider has the experience, technology, infrastructure, training, and manpower to keep your books and your payroll in order and humming right along. You’ll also be able to scale the service as your needs grow, instead of hiring additional people to manage a greater workload. Your bookkeeping service provider will provide a wide range of services, such as payroll management, bookkeeping, legal advice, tax preparation, and much more.

    What Can a Payroll Provider Do?

    A payroll service provider handles more than just basic payroll calculations. Let’s take a look at some of the support options they provide. 

    Payroll Processing

    They will calculate hours worked by all employees,  individual salaries and all deductions, so that you can issue a check, and ensure that everyone is paid on time.

    Wage Garnishment and Tax Withholding

    Another service that you can benefit from when you outsource your bookkeeping to an independent contractor is that they will ensure that garnishments, payroll deductions, and appropriate taxes are accurately withheld and paid from employee wages.

    Tax Filing Services

    Your payroll provider will file all local, state, and federal taxes for you and even assist with reporting and preparing forms such as 1099-NEC, W-2, and so on.

    Compliance Expertise

    As your payroll provider will keep up with the latest regulatory requirements, you’ll be able to remain compliant with all government requirements. You won’t need to worry quite as much about keeping up to date with wage and tax laws as they will ensure real-time compliance.

    Support

    If you require additional support, your payroll provider will be more than happy to help you. You’ll have access to qualified and caring specialists who can answer questions, troubleshoot software, fix errors, and counsel you on certain decisions related to your business’s finances. 

    business owner going payroll

    Benefits of Outsourcing Payroll

    If filling out forms, performing calculations, worrying about compliance and issuing payments is something you don’t want or don’t feel equipped to handle, you can rely on your payroll service provider to take care of the payroll process for you. Here are some of the benefits of outsourcing your payroll.

    1. Saves Time

    A great benefit of outsourcing payroll is that it helps increase company efficiency. Rather than having to spend a lot of time processing payroll, the independent contractor will handle all the work for you so that you can focus on your core responsibilities. 

    2. Reduces Costs

    Since they’ll be helping you avoid additional payroll hours that would have gone to an in-house employee, and the cost of equipment, they’ll help you save a lot of money. When you compare the cost of hiring an in-house bookkeeper and outsourcing payroll, you will quickly realize just how much money you can expect to save. 

    3. Minimizes Compliance Risks

    Staying compliant is never easy. As local, state, and federal governments continue to introduce new laws and change existing ones, there is a significant compliance risk that you need to prepare for. Often, your best option is to let someone experienced in this area handle it. 

    4. Provides Access to Specialized Knowledge

    When you outsource your payroll, you get to benefit from a team of professionals who have specialized knowledge of tax codes, bookkeeping matters, and financial planning. You can consult with them to find out how you and your business can sharpen each of these areas. 

    5. Ensures Data Protection and Security

    In order to protect your company and your customers, you need to understand just how important protecting your data is. Your payroll provider works with the latest security measures, multiple layers of protection, including state-of-the-art encryption, and more. They will remain transparent with you and employ several measures to protect your data. 

    6. Eliminates Stress

    Paying your employees on time can be quite stressful, especially if you lack the experience in bookkeeping or just don’t have the time. Don’t spin your wheels or give yourself anxiety worrying about accurate payroll, tax compliance, and keeping it all in order. Partner with someone who can do it all for you. 

    In Closing

    Managing payroll well is one of the most important things a business owner needs to do. It’s also something that many people neglect, procrastinate on, or get disorganized with. You can’t afford to not take payroll seriously. Choose a solution that takes care of all your needs and allows you to focus on leading your company. 

    Sound Accounts helps business owners increase productivity and relieve stress by managing payroll and all their bookkeeping needs. Connect with us today to learn more about how we can help you.  

    To learn more about managing payroll, see our frequently asked questions below. 

    FAQ

    Can I pay employees without an official payroll process in place and without using a payroll service or software?

    Yes, you can. But it quickly gets disorganized and leaves you wide open to costly errors and conflicts with your employees. It is strongly advised that you create a detailed payroll process and get the tools and help you need to manage it. 

    Can I pay cash in hand to employees?

    Although employers can pay cash to employees, it is best that you make a direct deposit or issue a check to avoid errors and remain in compliance.

    What is the most secure method for an employer to pay employees?

    The most secure method for paying employees is a direct deposit to their bank account. This eliminates things like misplaced or lost checks and cuts down on your employees’ time spent waiting for their compensation. 

  • 5 Ways to Make Managing Payroll for Your Small Business Less Daunting

    5 Ways to Make Managing Payroll for Your Small Business Less Daunting

    Cash flow can get tight as companies grow. Although you might be tempted to delay paying your employees, it is important that you focus on managing your payroll. As a business owner, you are responsible for ensuring proper payroll processing. The regulations are quite strict. You have to follow the FLSA (Fair Labor Standards Act) to stay on the right side of the law. Otherwise, you will need to pay some hefty penalties. To help you manage payroll with greater confidence, we offer you these 5 payroll strategies. 

    1. Effective Bookkeeping and Payroll Process

    One of the best tips that you should consider is establishing an effective bookkeeping and payroll process. It is the only way that you can avoid payroll penalties and keep everything in order. Since having accurate records is necessary for avoiding wage disputes, you have to focus on improving your bookkeeping and payroll process. It is the only way that you can avoid making certain mistakes and to ensure that you cover payroll taxes and wages accurately and on time. Besides, it will help improve your relationship with your employees and help you plan more effectively. Here are some of the best practices that you should consider for an effective bookkeeping and payroll process.

    Create a Payroll Schedule: The first thing that you need to do is create a monthly payroll schedule. It will determine when you pay your workers. You can use Excel to create a calendar for bookkeeping and payroll processing, or take advantage of scheduling processes within your bookkeeping and accounting software. It is best that you set the payroll period as either semi-monthly or bi-weekly to avoid any delays.

    Study the Tax Requirements: The next thing that you need to do is study the tax requirements. You must know how federal and state tax laws impact your payroll. As the IRS penalizes businesses that are unable to pay their payroll costs on time and fail to follow regulations, you have to gain a better understanding of all relevant laws.

    Set Payroll Policies: Once you know more about these regulations, you can proceed by creating payroll policies. If you have a business accountant, they can help you out. Make sure that the policies are simple so that no one is confused.

    Conduct Audits Periodically: As there is always a risk of mistakes being made, you need to ensure that audits are conducted periodically. A detailed workflow analysis is recommended for all types of businesses. It will allow you to identify and categorize your business income and expenses to ensure that they have been properly recorded.

    Implement Direct Deposits: Instead of offering cash or issuing paper checks to employees, you should consider implementing direct deposits. It will help save time, allow you to go paperless, ensure that workers are paid on time, and prevent the possibility of any mistakes being made.

    2. Good Organization and Recordkeeping

    The next thing that you need to do is focus on improving organization and recordkeeping. It is the only way that you can avoid mistakes. The more complicated the attendance and expense reimbursement, the harder it will be for you to record everything. Therefore, you have to focus on implementing good record-keeping practices as they will ultimately lead to effective organization. Here are some of the tips you should consider.

    Separate Recordkeeping into Categories: A great way to ensure proper records is by separating it into different categories such as reference materials, working files, admin records, and older files. When you separate records into different categories, you will have an easier time locating and managing them.

    Appoint Two Employees for Managing Records: For effective organization and recordkeeping, you need to make sure you have two employees to manage records instead of just one. It’s the only way that you can make sure there is always someone available to keep your records organized and navigable. 

    Ensure Record Clean-Up: To maintain efficiency, you will have to set aside record clean-up days to ensure that old records that are no longer needed are deleted.

    Keep a Detailed Inventory of Records: Document every record properly. Record the location of the record, the time they filed it, and the type of record it is. This goes for all types of records, including credit card statements, loans, financial statements, and so on.

    business owners managing payroll

    3. Seek Help from a Bookkeeping Service Provider

    Since managing payroll on your own is not an easy task, it is important that you get help from an expert. You are likely to encounter complications along the way, especially as your business expands. Since you’ll be focused on the core needs of your business, it will be a tremendous relief to partner with a bookkeeping service provider to handle this side of things so you can focus on leading your team and managing your business. 

    It’s common for businesses today to outsource their bookkeeping and accounting needs. Besides, processing payroll tends to be time-consuming and is likely to cause undue stress. If you do not have a dedicated department for bookkeeping, you should let a payroll service provider take care of everything. It will help keep you compliant with all the rules and regulations while also helping boost productivity. Moreover, outsourcing allows you to sit back and relax. 

    4. Use Great Accounting Software

    If there is one thing that you need to consider to better manage your small business payroll, it’s getting excellent accounting software. Performing payroll manually can lead to costly errors and poor relations with employees. The same goes for using an outdated system. It is crucial that you use a modern payroll system that is packed with the latest features for ensuring tax compliance, direct payments, attendance, and more.

    With the right payroll software, you will be able to cut down on the amount of time it takes to complete the payroll process. Recent software provides online access to ensure that employees hae a great payroll experience. They can keep track of their hourly wage, sick leave, social security, retirement plan contributions, taxable income, vacation days, hours worked and even generate digital payslips. Here are some tips you should consider when searching for the best accounting programs.

    Your Needs: Take note of your requirements and how your company operates to ensure that you are able to find the right payroll software. You also have to consider your industry and niche as there are certain applications that are dedicated to helping businesses in certain sectors.

    Cloud Applications: Since the cloud offers a host of benefits such as access to records from any corner of the globe, you should consider looking for software that has cloud computing capabilities. This will allow you to migrate to the cloud and gain a lot of freedom in your workflow.

    Cost: Next, you have to think about your budget. For the most part, there is an application to fit just about every budget. However, be willing to spend a bit more for greater flexibility and features. 

    Ask Your Payroll Service Provider for Help: Your payroll service provider should be able to offer expert advice to help point you in the right direction. It’s important that you leverage their experience.

    5. Clear Communication with Employees

    Communication is integral for managing your payroll. Here are some of the things that you must communicate with your employees to avoid any confusion.

    • How wages are calculated
    • How payroll mistakes are handled
    • Paid time off, sick leave, and vacation
    • Employee attendance requirements
    • How benefits and promotions are calculated
    • An overview of the payroll process and how it works
    • Employee classification (contractors, part-time, and full-time).

    The above information should be readily available so that your workforce can stay in the know about what to expect from the payroll process.

    Conclusion

    Managing payroll can sometimes be overwhelming. But it doesn’t have to be. Apply these trusted practices and partner with a great bookkeeper and you’ll set yourself up for continued success, both now and as your business grows. 

    Sound Accounts is your complete bookkeeping and payroll partner. We help businesses refine their workflow and find greater productivity at every stage of growth. Contact us today to learn more.

    To learn more about the payroll process, check out our frequently asked questions below. 

    FAQ

    What makes up the core of effective payroll management?

    The following tips will help you ensure effective payroll processing.

    • Set your budget
    • Think things through
    • Consider scheduling
    • Learn more about the payroll laws
    • Develop a payroll policy
    • Properly classify all your employees
    • Find a payroll service provider
    • Opt for the cloud
    • Double-check everything
    • Plan the employee benefits
    • Document the payroll process
    • Create a bank account for processing payroll
    • Audit the processes
    • Maintain good records

     

    How do you reduce payroll errors?

    Here are some things that you should consider to help you cut down on payroll errors.

    • Learn more about the latest rules and regulations
    • Never miss deposit deadlines
    • Correctly process wage garnishments
    • Never rely on the payroll software alone
    • Classify your employees correctly and review the classification from time to time
    • Report the fringe benefits you provide
    • Partner with a bookkeeping and payroll service provider

    Why is managing payroll effectively so important?

    A clean, clear payroll process helps you make the most of your resources and team members, while keeping them happy, managing your money for growth and staying compliant with government regulations. 

  • How Bookkeeping Service Providers Make Payroll Easier and More Efficient

    How Bookkeeping Service Providers Make Payroll Easier and More Efficient

    One of the best decisions that you can make is to hire a bookkeeping service provider for your business. Since managing employee payroll is not an easy task, it is sometimes wise to leave this work to a full-service payroll company. 

    You might think that you can pay your hourly employees on time using accounting software like QuickBooks Payroll and take care of all payroll taxes on your own. However, if you want to remain focused on the core needs of your business, payroll responsibilities can be a distraction and a drain on your energy. 

    Even if you have defined your payroll plans and possess a bit of accounting knowledge, there is a reason why companies rely on contractors for tax filings, keeping the books, and other payroll services. Business owners want an experienced partner to look over their finances and to not be distracted by worrying about it themselves. Here’s everything you need to know about bookkeeping service providers. 

    What Are Payroll Services?

    A payroll service handles all your payroll accounting. This means that they would manage the recording and management of employee compensation, direct deposits to their bank accounts, and assist with generating financial reports for effective tracking of expenses. Moreover, the service provider would also manage all the withholdings such as federal and state taxes, Medicare taxes, contributions, social security, wage garnishment, and health insurance premiums.

    Since payroll is an integral element of every business, you need the help of an expert to better manage your company. Through outsourcing, you get to save yourself the trouble and focus on improving your business.

    Benefits of Contracting a Bookkeeping Service for Payroll

    There are many perks to partnering with an experienced bookkeeping service provider. Let’s look at a handful of them.

    1. Saves Time

    A major benefit of outsourcing your bookkeeping tasks is that it helps save time. You might think that bookkeeping is a task that simply needs to be performed twice a month. However, it could not be further from the truth. It requires attention to detail and full commitment. Completing bookkeeping takes a great deal of time on an ongoing basis. Otherwise, you are likely to end up making costly mistakes.

    As your team continues to expand, it will only take more time to perform bookkeeping responsibilities yourself. Checks and balances must be ensured throughout the month to eliminate the possibility of any errors. This is why it makes sense to opt for a payroll service provider. It will save you the trouble and help you spare a ton of time so that you can put it to good use growing your company.

    2. Cost-Effective

    A common misconception that many businesses believe in is that outsourcing is costly. However, it is actually more cost-effective to hire a bookkeeping service provider instead of employing an in-house team to handle the accounting systems and look after all programs and devices. If you decide to employ an in-house team, you would have to train them, outfit an office, and make sure that your team keeps up with the latest technology and trends. Besides, you would have to put in a lot of time to get the department up and running.

    When you combine all the costs that will need to be incurred to establish a bookkeeping department, you will come to realize that hiring a payroll company is a much more affordable option. All you will need to do is pay the service provider a flat fee for an amazing service. Thus, you can expect to save money.

    a bookkeeping provider making life easier for a business owner

    3. Stay Organized

    A great benefit of contracting a bookkeeping service provider is that it helps organize and simplify everything for you. The contractor will help you put your records, finances, and other documents in order. They’ve got the technology, infrastructure, and most importantly, the experience to manage your books and payroll perfectly. No matter which accounting tasks need to be taken care of, they can handle them. 

    4. Ensures Accountability and Promotes Discipline

    When you hook a bookkeeping service provider, you will be delighted to know that they will not rest until they exceed your expectations. They’ll ensure error-free payroll management, helping you maintain accountability and discipline in this area of your business. And with most of the day-to-day payroll and bookkeeping work off your plate, you’ll be able to focus on your customer experience, product quality, and employee morale and success. 

    5. Accuracy

    In addition to the above, you will also benefit from accuracy. When running a business, it is crucial that you seek to remain error free, in payroll management, as well as with taxes, in-house documentation and when compiling customer data.. This is another place where a bookkeeping service provider truly shines. They possess the skills, tools, and experience needed to maintain accuracy, even in a whirlwind of incoming information and changing data. 

    Accuracy keeps you organized, helps you avoid costly or timely errors, makes sure you’re abiding by all rules, and increases the level of trust that the public has in you and your brand. 

    6. It Helps Keep Your Employees Happy

    If you take on payroll management on your own, you are likely to make mistakes such as missing or duplicating data. This would result in payroll discrepancies which can affect staff morale. You risk underpaying or overpaying workers, which is always damaging to you if you need to backtrack and fix the situation. Employees are likely to distrust you in the future following mistakes like this. 

    Your payroll service provider will go out of their way to make sure that your employees are paid exactly what they are owed with all deductions and withholdings precisely calculated. Again, opting for an expert ensures your brand credibility and your own reputation are maintained.

    7. Keeps You In Good Standing With the IRS

    Compliance with the IRS is essential for running a successful business. Your service provider will be a virtual payroll guru, so they will make certain you never miss deadlines and are able to check off every requirement the IRS has.. 

    It’s too easy, especially when you’re just starting your business or during a season when things are getting uniquely busy, to lose track of certain imperative guidelines and rules, and rush through things just to get them done. But this will only slow you down when your errors come back to bite you later on…something you simply can’t afford. 

    8. Lowers Stress

    Every business owner knows just how stressful it can be to manage bookkeeping. Between everything you have to manage and the time and focus it takes to see your vision through, having to worry about overseeing every aspect of your bookkeeping process can add a significant level of stress to your daily life. 

    Bookkeeping service providers will help free up your time and energy so that you can relax and focus on running the business. More than this, though, when you’re running a business, it tends to spill over into your personal and family life. Putting payroll responsibilities on that pile means more time away from loved ones, less time for you to relax and recharge, and less freedom to enjoy the success you;re already experiencing. 

    9. Improve Cash Flow

    If you are having cash flow issues or want to improve your revenue, you can turn to a bookkeeping service provider to help you out. Bookkeeping professionals will look into every aspect of your budget to spot trouble spots or missed opportunities. This includes a thorough analysis of payroll. They can assess your current situation and future needs and make recommendations based upon these observations that can help you keep more cash in-house.

    You may pay for too much overtime when another option exists. You also might be over-hiring and investing a lot into training when cross-training other employees or promoting from within could be a better solution. 

    payroll service provider helping a business manage their payroll

    10. Streamline Your Payroll Process

    Bookkeeping service providers are great at choosing just the right tools and policies to help streamline and refine your company’s payroll process. Whether it be adopting direct deposit, shifting to a more reasonable pay schedule, moving from physical time cards to an electronic system, and helping you create a cleaner, easily accessible, and instantly updated online employee schedule, their suggestions help make your team members an even greater and more valued asset in your organization. 

    Conclusion

    You might think that by handling the payroll on your own, you’ll be staying in control and saving money. Consequently, oftentimes, the very opposite is the truth. Attempting to juggle everything from planning and development, to customer experience, product design and marketing, can leave you exhausted and cause you to miss out on the power gained from strategic partnerships.  Adding payroll responsibilities to this already growing pile will dilute your focus and energy that much more. Professional partners help us build the kind of business we always wanted. 

    Sound accounts helps business owners find greater success by expertly managing their books and their payroll process. This means more productivity and less dress for you. Contact us today to learn more about partnering with us. 

    To learn more about the benefits of bookkeeping service providers, check out our frequently asked questions below. 

    FAQ

    How does a bookkeeping service provider benefit my business?

    There are a number of benefits offered by a bookkeeping service. By hiring their service for your business, you can expect to reduce stress, cut down costs, make compliance with the IRS, improve your cash flow, maintain accurate records, and keep employees happy.

    What is the Importance of bookkeeping and accounting?

    Bookkeeping and accounting are considered one of the prime languages of business. If you want to gain a better understanding of your company, you need to get them right. Detailed financial management is the cornerstone of long-term success. It will help you gain a deeper understanding of what makes your business tick and how to make it function at a much higher level. Partnering with an expert in this area can help you get the most benefit out of your bookkeeping and budget. 

    What are the responsibilities of a bookkeeper?

    A bookkeeper has various responsibilities and areas of expertise. Here are some of the most common below.

    Sends invoices to clients

    Prepares financial statements

    Keeps the company prepared for tax time

    Day-to-day management of accounts and expenses

    Maintains updated and accurate records

    Ensures your business follows all applicable laws.

    Handle accounts receivable and accounts payable.

    Processes and manages all payroll needs

  • 7 Ways To Keep Your Business Payroll Under Control

    7 Ways To Keep Your Business Payroll Under Control

    For business owners, one of the biggest expenses that you need to keep a handle on is your employee wages. It can help ensure a healthy cash flow and allow you to reduce your accounts payable balance. Business owners have to learn how to keep their payroll under control to cash in on every opportunity that comes their way. 

    The fact is that the wage paid to hourly workers has been on the rise across the United States. This is why you have to make sure that you can cut down on costs to keep your business strong. Otherwise, you may have to use your credit card to pay employees. Although you can reduce wages, lay off employees, and reduce employee benefits policies, there is no need for you to take such drastic and damaging actions unless absolutely necessary. 

    If you take such strict actions, employee morale will plummet which will definitely affect the quality of service provided to your customers. To gain better control of your business payroll, consider the following tips. 

    1. Determine Your Labor Burden Rate

    The first thing that you need to do to keep payroll under control is to determine your labor burden rate. Find out what you’re paying to every employee to cut down on labor expenses. Determine what you provide on top of the hourly rate or basic salary. The total value is considered the employee burden rate. 

    In order to calculate the employee burden rate of each employee, you must add their annual hourly wages or salary, extra compensations like bonuses and overtime, mandatory insurance, payroll taxes, and other employee benefits such as health insurance and 401(k). When you have an idea about how much you are paying every worker, you’ll be able to determine where you’re overspending.

    business owner maximizing payroll with great employees

     2. Optimize Employee Scheduling

    Another tip that businesses should consider is optimizing employee scheduling. When there is a clear schedule, everyone knows exactly what to expect.  This decreases schedule conflicts and helps prevent the need to pay overtime. With a proper understanding of employee costs, you can focus on dialing in your schedule to maximize your productivity within a reasonable number of employment hours used. It will also provide you with the added advantage of a happier workforce as they never have to deal with late, unclear, or shifting schedules. Overtime is necessary sometimes, during emergencies, illnesses, special events or sudden expansion opportunities. But when you plan ahead, you can minimize the times when overtime becomes a necessity. 

    3. Employee Retention

    Focusing on employee satisfaction and retention increases productivity, morale, and longevity. If you key in on hiring well from the start, you’ll avoid problems later with unsatisfied or disgruntled employees leaving. If you’re losing talent regularly, you’re spending a lot of money on training new people. 

    Make sure you’ve got the right people in the right jobs to maximize on their talents and skill sets. Look for opportunities to promote from within to keep upward momentum going for talented individuals who want to help your organization grow and succeed. Pay close attention to the relationships between your staff and their managers, something that has a great impact on the desire of employees to stick with you. Work on improving communication between employees and supervisors and between departments. 

    4. Look at Communication and Redundancy 

    Looking closely at your organization’s effectiveness when it comes to internal communication and possible departmental redundancies is a fantastic way to refine your processes and save payroll. How well are department heads, project leaders and others communicating? Is vital information clearly and efficiently shared? Or are there gaps in their exchanges leading to missed opportunities and repeat meetings? 

    Is your marketing department handling jobs better suited to sales or vice versa? Is R&D handling too much admin? Are two or more people repeating work…doing essentially the same job with only minor variances? It’s time to really dive deep and look at how well your people connect, share information, divide work, and execute on initiatives. 

    business manager trying to control his business payroll

    5. Develop Greater Productivity

    Do you have the right technology in place to equip your people for success? Outdated programs and hardware can lead to slower production, late orders, lost communications, and confused team members. All these lead to a greater burden on payroll from the increased demand on staff to fix these problems. 

    Also, look at new ways to accomplish old jobs. Are there new training programs, new philosophies, new ways of organizing or performing some of your primary functions that would kick them up a notch? Research what other companies are doing that seem to be relieving their stress, lowering their payroll, and upping their output. 

    Below, you’ll find a few more tips on increasing productivity.

    • Ensure Employee Retention: To boost productivity, you have to attract and keep the right people. It should be at the heart of your payroll strategy. 
    • Cross-Train Employees: Another great way to increase productivity is by cross-training employees. You need to teach each employee different skills so that they can take on more work which will ensure you don’t need to hire more people or ask someone to work overtime. 
    • Automate Tasks: To improve productivity, you can sometimes turn to automation. Review different procedures and find out if you can automate them. It will allow you to cut down on labor costs. You might not even need as many employees in a certain department. 
    • Get Employees to Work Overtime Instead of Hiring New Employees: As a last option, you might need to get your workers to work more hours to cut down costs. The reason behind this is that hiring more employees would only cost more money as you would have to pay for employee benefits for them as well. In such a situation, overtime would prove to be a more affordable option.

    6. Consider Outsourcing Some Things

    Another way to keep payroll under control is to find certain tasks that might benefit from outsourcing, specific administrative, communications, media, marketing, or other jobs that outside contractors can perform part-time. With the right contracts and oversight, this can cut down on your payroll, benefits burden and increase productivity in the process. 

    7. Become Agile

    Lastly, you should consider becoming agile to conquer employee cost challenges. The agile philosophy requires you to rethink everything and focus on finding a better way to do things while ensuring that you remain flexible. This mindset helps you break down large goals into accessible steps. This can improve your workflow and cut down on wasted hours. 

    Conclusion

    Controlling employee costs is often one of the most difficult things to manage as a business owner. It can affect your employees’ level of satisfaction, your quality control, and your staff retention.  There is a lot that you need to consider when attempting to get it just right. You want to make changes that give you the most productivity for the labor hours used while maximizing on employee talent and improving team member satisfaction. You might want to seek the help of an expert. A payroll and bookkeeping service provider will be able to provide the best advice so that you can keep costs under control.

    Sound Accounts helps businesses make sense of payroll, maximize on resources and spot opportunities for growth. Contact us today to learn more about partnering with us. 

    To learn more about keeping payroll under control, see our frequently asked questions below. 

    FAQ

    How do I save money on payroll?

    There are lots of ways. Organize your employee schedule more efficiently, study your departments to find redundancies or inefficient communication, update technology to give your employees an edge, rethink certain perks, consider outsourcing some tasks, and focus on hiring great talent and keeping them happy so you can avoid the cost of unnecessary hiring and training. 

    How do I keep the payroll process from becoming overwhelming for me?

    One of the first things you can do is get a great payroll service. Services like Paychex, QuickBooks Payroll, Gusto and others, offer countless options, superb organization, automated payouts and updates, and a range of other features to streamline the process and put your mind at ease. 

    Next, consider partnering with a great bookkeeping service provider to look over your payroll and finances. They can provide you a higher level of management that frees you up to focus more on leading your team and capitalizing on your people’s talent. 

    Is controlling payroll always about reducing hours or laying people off?

    Definitely not! In fact, if you can avoid this, you definitely want to try. Choose other solutions first like focusing on hiring the right people, refining production practices, streamlining communication between departments, getting better trainers to help reduce training time, becoming more agile in your approach and uncovering places where certain tasks or meetings are being repeated. 

  • 5 Tips to Simplify Your Small Business Payroll Process

    5 Tips to Simplify Your Small Business Payroll Process

    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. 

    business owner working to simplify his payroll process

    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.

  • How to Get Your Small Business Payroll Ready for Tax Season

    How to Get Your Small Business Payroll Ready for Tax Season

    Business owners have to minimize their tax liability during tax season in order to save money. Payroll issues are likely to arise when submitting tax returns. This is why it is crucial that you prepare yourself thoroughly for this process. All businesses have to calculate and pay taxes at regular intervals and stay current with all tax requirements. 

    Generally, you will need to make payments every quarter. In addition to this, you also have to follow the payroll tax schedule. As you have a responsibility to make a tax payment, everything is interconnected. To help you prepare your payroll for tax season, here is everything that you need to know. 

    business owners preparing for small business payroll tax season

    The Importance of Preparing for Tax Season

    When tax filing season comes around, it is natural to worry. No one likes paying taxes and we like being scrutinized even less. This is why it’s important that you get prepared, especially when it comes to payroll. 

    Since preparing your accounts for taxes can be complex, the earlier you go through your business transactions, your balance sheet, and other statements and reports the better. It can be difficult to navigate US taxation when it comes to payroll. The following reasons highlight the importance of good preparation.

    1. Saves You Money

    One of the main reasons why you must review your payroll for tax season is that it can help you save money. It would give you enough time to identify deductions and credits that you might have not even thought of.

    2. Minimizes Time Involved

    Another reason to prepare for tax season is that it helps minimize the amount of time involved. This allows you to manage your available time wisely. By going through all the forms, documents, payments, receipts, and business expenses, you’re able to determine your taxable income regardless of your business type or business structure.

    3. Eliminates Errors

    No matter how many workers you might have who report to you, it is important that you prepare for tax season to eliminate errors. Errors in payroll taxes can result in audits or penalties. They can also keep you on the IRS’s radar, so to speak, and decrease the confidence of your staff. 

    Top Ways to Prepare For and Navigate Tax Season

    If you are preparing your payroll and other tax documents, you should consider the following tips to breeze through this tax season.

    1. Ensure That You Are IRS-Compliant

    The first thing that you must do before you file any documents is to find out if you are currently IRS-compliant. Make sure that you have properly classified your employees and that you have an EIN (Employer Identification Number). Be sure that all payments and filings are up to date and that you have no outstanding taxes owed for past filings.

    2. Review Documents and Data

    The next thing that you need to do is go through your documents and the information you’ve entered in reports or tax filings to ensure accuracy.

    Even though you have certain things automated, there is still the possibility that mistakes such as misspelling names, transposing numbers, and checking wrong boxes can happen. What seem like simple mistakes can lead to unforeseen consequences down the road. 

    3. Determine Year-End Payroll Before Proceeding with Business Taxes

    Once January comes to an end each year, you have to do a few things as mentioned below.

    • Submit a copy of W-2 for each employee.
    • Submit a Form 940 that contains a summary of the tax payment made for the year and a Form 941 which indicates that quarterly federal tax payments had been made.
    • Submit a Form 1099 if you have hired any contractor and paid over $600 in the previous year.

    4. Know All Payroll Tax Deadlines

    When the new tax year begins, you have to meet multiple deadlines. Most of these will require you to close your financial records for the previous year. You will also need to work out strategic plans. It makes sense to focus on meeting the W-2 deadlines first as you can’t use an extension and would immediately incur penalties. It’s a good idea to have a schedule or calendar posted somewhere that displays all the tax days for the entire year.

    6. Evaluate Payroll Write-Offs

    After you have calculated total wages along with their respective taxes, you should be able to determine if you qualify for a small business deduction or not. Here are some payroll expenses that you should be able to write off.  

    • Cash awards.
    • Paid vacation and sick days.
    • Reimbursements made for covering travel expenses.
    • Bonuses and commissions in case they would be considered additional wages.
    • Benefit programs like an accident, life, and health insurance as well as education reimbursement.
    • Contributions made to certain state payroll taxes, unemployment benefits, social security, and Medicare.
    • Wages paid that qualify as a necessary and ordinary business expense. These are typically considered an expense during the first year of startups.

    7. Have the Right Records on Hand

    Lastly, your tax process will require certain records. You never know if the IRS or the state might conduct an audit and thorough records help you manage your payroll, finances and employee relations with greater ease and confidence. 

    Keeping all necessary documents in order and quickly accessible allows you to access them right when you or the IRS needs them. It also helps you stay organized and on-time. IRS guidelines advise businesses to maintain tax records for up to three years. However, employee records have to be kept for four years. It is best that you keep both electronic and paper copies to stay on the safe side.

    business owner working on payroll for tax season

    Reasons You Should Consider a Professional Bookkeeping Service

    Since handling your payroll and tax issues on your own can be extremely difficult, it might be worth considering seeking a professional bookkeeping service. Here are a few reasons. 

    1. Allows You to Focus on Core Business Activities

    A major reason you could use the help of accountants or a professional bookkeeping service is that it enables you to focus on your core business requirements. To run your business successfully, you need time, attention, good resource and personnel management, a clear plan, and consistent leadership. Hence, the last thing you want is to spend a lot of time working on payroll and taxes and losing track of what matters most to you. 

    2. Helps You Navigate Taxes

    Since most owners don’t have a background in finance or accounting and don’t know how to manage accounts, it is best to leave the job to an expert who is certified and has the experience needed to handle every aspect of the bookkeeping and tax process. They can help you limit mistakes which would otherwise prove detrimental to your business.

    3. Provide a Different Perspective

    Tax experts work with just about every type of business, and because of this, they’ve acquired a great deal of knowledge. When you hire one to help you out, you get to benefit from their storehouse of experience. 

    Even though you might think that you are managing your startup well, it is always best to seek all the help you can get. Having another pair of eyes allows you to see things that you otherwise might not have noticed.

    4. Eliminate Tedious Work

    Tax submissions can be grueling to take on completely on your own. It makes sense to escape it by seeking a bookkeeping service provider. Preparing your payroll and managing your accounts is often not something you tend to feel passionate about. Bookkeepers are geared for it and will ensure that everything gets managed in the best way possible. 

    5. Ensure Correct Tax Filings

    A great bookkeeping service provider is highly meticulous with details and focused on making sure every piece of information is perect. They go through every corner of your payroll and finances to ensure complete accuracy and compliance. As there are various requirements that you have to meet, it often helps to get a financial expert involved.

    6. Reduce Financial Obligations

    Now, you might think that you can handle all your taxes on your own in the hope of reducing costs. However, you may be missing a few things. A professional bookkeeper would help you save big. The fact is that missing out on tax obligations and payments is easy to do when you’re focused on everything else.

    A lack of knowledge, and the possibility of human error could prove costly. Trying to backtrack and fix errors and pay fines can be overwhelming. 

    Conclusion

    Taking time to walk through the process of preparing your payroll for tax season will pay off several fold. Don’t miss any of the steps and tips above and start early, that way you can avoid the stress of last-minute action. And never hesitate to reach out to a qualified bookkeeper to help you navigate tax season. Their invaluable advice and professional focus will keep your business humming right along. 

    Sound Accounts helps businesses of all kinds stay on top of their payroll and prepare for tax season with confidence. Contact us today to learn more about partnering with Sound Accounts for your bookkeeping needs. 

    To learn more about preparing your payroll for tax season, check out our frequently asked questions and answers below. 

    FAQ

    How do small businesses keep track of taxes?

    Small businesses keep track of their taxes by maintaining accounts, going through their bank statements, understanding your assets, reading through and analyzing all financial reports, staying organized, keeping current with all IRS codes and requirements, and preparing in advance.

    If I need help with payroll or taxes, where should I turn?

    Hiring either an in-house bookkeeper or contracting with an excellent bookkeeping service can help you make sense of your payroll, fix mistakes, find money-saving opportunities, and prepare thoroughly for tax time. 

    Can I write-off small business expenses?

    There are several expenses that business owners can deduct. It is important to familiarize yourself with current options here and reach out to a qualified professional with any questions or needed assistance. Common deductible expenses include:

    Payroll

    Office furniture

    Office equipment

    Rent or lease payments

    Company vehicles

    Company travel and lodging

    …and much more.