Running your small business finances successfully can be a hassle. Luckily, there is a lot of technology to make the various processes smoother. For most small businesses, payroll management is the most time-consuming and tedious task. But without proper payroll management, your business can suffer as a result, both financially and in terms of productivity and even talent acquisition. What are the little tricks and tips that can help make the process smoother?
Understand Your Employee Types
You will need to have a clear idea of your employee types. It’s important in terms of the regulation, as different types of employees might have different rules for them to follow in terms of the payroll. Therefore, you want to start by categorizing your employee types. For example, you might currently employee part- and full-time workers, as well as have people working under a contract (which is different to being an actual employee). When you understand the different types of employee you have, managing your payroll will become easier and also ensure you can set up the payroll faster. Once you have employee types determined, you can move on to things like salary and the number of hours these groups work and so on.
Set up Payment Cycles
You will have the option to choose your payment cycles. The cycle can vary between the different employee types and therefore, you want to determine these cycles after you have identified the kind of employees you have. With payroll software, you are generally allowed to pay weekly, monthly or every few months, for example. It is important to set this up and determine it prior to drawing employee contracts. Your employees need to know what kind of payment cycle they agree to before the contract.
Once you have set up payment cycles, it is important to make note of the big deadlines. You need to have a good understand also of how your payroll management might influence your other financing decisions. For example, when do you normally receive payments from customers or contractors and what kind of tax laws apply to your specific business situation? In UAE and elsewhere, different types of organizations can have varying rules when it comes to tax payments and payroll management.
Invest in Good Payroll Software
One of the most important things you can do is set up proper payroll software to manage your situation. The benefits of payroll software are immense and include things like:
- Better compliance with changing regulations – staying on top of compliance can be hard but software will help do this for you.
- Automation of mundane tasks – payroll management software can automate many mundane tasks which leave less work for the HR and Finance Departments.
- Reduction in errors – because of the automation and the use of technology in managing payroll, you can reduce costly human errors.
- Saving time – overall, a major benefit of payroll software is the amount of time it can save your employees.
You want to take proper care when selecting payroll software. A good payroll management system will work wonders for your business but if you don’t compare your options, you can end up with a bad one. It is important to approach the selection process by understanding the functions you need and the options available for your business.
Make Use of Payroll Software Support
Now, it’s a good idea to opt for software with excellent payroll management support. You want the software to respond to your queries, be easy to use and in general, help you make the most of it. So always make sure to go with an option with in-software support as well as things like email and telephone support.
If possible, you should also invest in software training. You can find different companies offering them when you switch to a new product. Having your employees trained can ensure the enrolment of the program is smooth.
Establish Payroll Policies and Processes
Once you know how you are going to deal with payroll management, you want to set clear guidelines. You should set a company-wide policy and process that is available for all employees. A standard payroll policy means that everyone from the higher management to HR and your employees are aware of how payroll works. Everyone will know what the payroll period for them is and how much they can expect to earn, along with how certain other benefits are dealt with. This makes it easier for everyone involved and ensures your employees can understand their own payroll and benefits.
Have a Payroll Manager
It is also helpful to have a key person in charge of your payroll, even if there are a few people in charge of payroll management. You want a single contact point to ensure people aren’t talking to the wrong person. Your staff will be aware of who the person is and if they ever have any problems, they will be able to consult the right person right from the start. The person can then delegate tasks or problems to others if necessary but having a single “in charge” person can be a great way to keep things running in order.
Keep Track of Your Finances
Finally, it is crucial to make sure you stay on top of your overall finances and not just the payroll. As mentioned above, you need to ensure that your business can make payroll payments on time without it causing any financial problems. Even with automated payroll management software, knowing whether you have money or not is key. Therefore, you need to keep an eye on your cash flow at all times to ensure that you are generating enough money to cover costs. This also ensures you understand how productive your employees are – you do not want to keep paying a high salary if you don’t receive good input from your employees in return.