Payroll Best Practices To Save Time & Money For Your Businesses (2023 Update)
Operating a business can be a challenging and time-consuming task. As the business grows, managing payroll can be one of the most time-consuming aspects of it, not to mention the costs. Everything from inefficient manual processes to ghost employees can drain your cash every day.
Regardless of the size of your company, and as we enter 2023 taking the time to benchmark your current processes against payroll best practices can help you uncover small opportunities for improvement that lead to big payoffs.
So what are some of these best practices? Below are the 9 payroll best practices to save time and money for your business in 2023.
- Digitise your procedures – Payroll is task-driven and time-sensitive, many of the same tasks are completed each and every pay period. Documenting your payroll procedures digitally is the first step in taking control of your payroll department. It’s safe, avoids mass heaps of paperwork and is beneficial to the structure of operations. In case of any form of audit, it is easier to present your department’s payroll procedures.
- Create a comprehensive payroll policy – A payroll policy is a document that explains the process of payment to the employees as it involves the administration of salaries, time-sheet keeping, wage methods and payment schedules of an organization’s employees. Having a well-defined and comprehensive payroll policy provides clarity and organization as well as makes employees conscious of what they should anticipate on payday.
- Create your payroll schedule: – Creating a payroll calendar that outlines all the crucial dates taking place for the year keeps your company on task and running smoothly. Your payroll calendar should include: pay dates and pay periods, holidays, and processing dates (including payroll itself as well as taxes, direct deposit, commission and bonus runs) It should also include any benefit payments and data transfers. Make your calendar as easily accessible as possible to everyone in the company.
- Ensure accurate employee information – As companies continue to embrace remote work and distributed teams, it can be difficult to keep up to date with all your workforce’s personal details, including tax compliance. Payroll processing becomes twice as hard when you have to redo the processing time and time again due to incorrect or outdated information. Make sure you’re always asking your employees to update their information when they move to a new address for example. Again, having an easily accessible system in place is key.
- Quantify your time – It is very important to know how much time you are spending on payroll every month and how much that time is costing you. How much of that time can be spent on other more productive tasks? This is a very important question to ask yourself as a business owner to find more efficient ways to process it.
- Prioritise Data Security options – Data security will remain one of the most important issues in 2023. As a business owner, it’s important to consider your data security options to keep your company’s data, and that of your employees safe from any leaks and scammers. Remember you have your employees’ full names, locations, bank account details etc. Taking the measures to keep all this data safe will ensure you don’t incur any costs that may arise due to data loss.
- Ensure Compliance with law and regulations – Penalties for lack of compliance can be significant and may come in form of fines, debarments from government contracts and even criminal persecution. Governments can be aggressive and private lawyers and unions are always looking to generate class-action lawsuits. Here are a couple of steps you can take to make sure you are compliant in 2023: File all certified, non-performance and equal employment opportunity (EEO) reports accurately and on time. Keep all reports up to date and make sure they all match. Know each county’s or state’s laws especially when it comes to employment. Have employees sign off on any deductions.
- Streamline your payments – As businesses continue to adjust to the post-pandemic world, the rise of distributed teams has made it more and more important to streamline processes and make them easy. Payments are no different. It’s advisable to find a service provider that allows you to make payments on one platform and at the same time. Choose a service provider or platform that allows you to send instant one-off payments or off-cycle payments whenever you need. That way, your employees can access their payments instantly and without delay, which is less hassle for you and your team.
- Consider Outsourcing – As you may have seen, payroll best practices can be quite tedious to keep up with especially as your team grows and as you start to hire remotely. So why not outsource your payroll processing to professionals and leverage their specialisation? Outsourcing your payroll means that you get to focus your time on more of your business’s core competencies, all while saving time, money and helping you stay compliant.
One major advantage of outsourcing payroll is cost savings. By hiring a third-party provider to handle payroll, businesses can reduce their labour costs by eliminating the need to hire, train, and retain in-house payroll staff. This can free up resources that can be used to invest in other areas of the business and help to boost overall efficiency and productivity. Additionally, outsourcing payroll can help businesses to reduce the risk of errors and mistakes, which can be costly and time-consuming to fix.
Now you’ve got all your payroll best practices down to a tee. Are you ready to take your business to the next level?
Superbhire not only helps connect businesses with the best-in-class remote talent. We help you find, vet and hire the best and help you handle payroll as well. Contact us today to learn more!