Is your payroll management strategy not where you would like it to be? Let us help you out with this quick guide on how to better manage payroll.
A report from the fourth quarter of 2022 showed that 63% of Americans live paycheck-to-paycheck.
This statistic alone should show you how important payroll management is crucial for your business. But if your business payroll operations aren’t going well, you need to improve it ASAP!
So what do you do? What’s the best way to manage payroll for your company?
Here’s what you’ve got to do:
If you’re struggling to manage payroll, then you might want to have a look at a payroll service.
With so many business operations, you likely forget to take extra care to manage payroll. It’s only natural as your company scales. As a result, you want to outsource services to a company whose only focus is on payroll management.
In the meantime, however, let’s look at a few strategies on how you can improve your company’s payroll operations.
Prepare a Payroll Calendar
Do you ever wake up and remember that you forgot to do your payroll tasks yesterday?
One of the easiest methods for effective payroll management is to create a payroll calendar. You must set a specific date and time each week to complete your payroll tasks.
Set up reminders for your email inbox, desktop devices, and mobile devices. This ensures that you’ll never forget to complete a payroll task.
If you have multiple members with payroll responsibility, make sure they also receive these reminders.
Be Aware of IRS Policies
One of the most important parts of business payroll is to send tax documents. You have to send tax documents to the IRS and copies to your employees.
There are penalties if you don’t submit your documents to the IRS on time. But if you don’t send W2s and 1099s to your employees and contractors, you’re making their lives much harder.
They’ll depend on you to provide them with official documentation on how much they earned. IRS deadlines often change with different political administrations.
At times, you’ll have more time to submit a document. At other times, the deadline will get pushed back!
Set Aside Cash for Payroll Tax
The final part of payroll management is ensuring you have the funds for paying your payroll tax.
Many small business owners make the mistake of borrowing cash for this. But this can cause you serious issues in the future since you’ll accrue debt. Create a separate bank account solely for keeping cash aside for payroll tax.
If you follow the steps in this guide, you’ll have no problem improving your payroll management process.
The Next Step After You Manage Payroll
It’s always best to get another company to handle payroll tasks for you. This lets you focus on your other tasks.
Otherwise, make sure you always have a payroll calendar. This helps you keep track of meeting deadlines. You have to also keep abreast of any new IRS deadlines.
As for payroll tax, don’t forget to pay it! Make sure you always set aside cash so you always pay in full.
Now that you know how to manage payroll, check out our other articles to maximize your business operations!