Each employee heavily relies on payroll, whether it happens weekly, bi-monthly or monthly. No matter the payroll schedule, employees rightfully expect to be paid the right amount, to the accurate account and on time. In some circumstances, payroll is a time-consuming, lengthy and tedious process, and these common issues can wreck havoc on the entire payroll process unnerving hard working employees.
Surely you have heard of several rumors or myths about payroll making the whole process seem daunting. And if handled incorrectly, or inefficiently rather, then yes, some of these rumors stand true. Yet, with the right information, partners and tools, you can quickly learn that these myths are purely that, myths. Keep reading to learn how to fix even the most complicated payroll issues.
Myth 1: Handling payroll in-house saves money, time and is error-free
Unlikely. As a matter of fact, just the opposite is true. Let’s breakdown this myth further:
FACT: Hiring, Onboarding, and Paying Payroll Employees is More Costly than Outsourcing – By handling payroll in-house, you are spending money on an employee or group of employees to handle your payroll. Likely their salaries combined are much higher than online payroll systems or payroll providers. Not only considering salary, the time and resorces spent on handling payroll can start to add up. You could either lessen your staff by outsourcing payroll, or you could transition those past payroll employees to more necessary, business-related positions that bring in more success to the company overall.
FACT: Rush Periods, such as Onboarding, End-of-Year, and Tax Season Strains Company Time and Resources – Payroll is extremely time-consuming when you have to calculate hours and pay, distribute money, review and approve each payroll run, and more. Payroll rush periods only add to the burden. This is especially true when most in-house payroll departments do not add staff to handle the extra workload. When you have a payroll provider or use an online tool, the process happens automatically, quickly and without hours upon hours of number crunching.
FACT: Nothing is Error Free and Payroll Errors are Especially Disruptive – Payroll providers make it their overall mission to handle and perfect payroll processes. They are trained and educated in the most efficient tools and systems allowing for far less error than a hand-held calculator, espcially considering the ever-chaning payroll, tax and compliance landscape. Plus, if in a very rare instance an error does occur with a payroll partner or online tool, the fault does not rest on an employee. Rather the fault lies with someone outside of the company. Allowing a payroll provider to handle your payroll frees up time for business owners to focus on what matters most; their business, their employees and their customers.
Myth 2: Fillable timesheets are necessary for compensating employees.
FACT: Fillable paper timesheets are a thing of the past. Not only is this process outdated, but also it can be inaccurate, difficult to keep track of for both employee and payroll accountants, and inefficient.
If possible, providing salaries or value-based compensation is much simpler. In cases where this is not an option, timesheets can be handled online much more easily than on paper. Many online payroll tools, both offered through payroll providers and through payroll software, are fast, very manageable and easy to calculate. Let the computer do more of the work so you can release some of the time and responsibility of your employees.
Myth 3: Keeping track of accruals, PTO and sick days are a necessary part of business.
FACT: Tracking accrual to the exact hour isn’t exactly necessary. Most companies do have a formal accrual process set in place in regards to sick days and PTO. Whether it’s accrued throughout the year, based on tenure or given at the start of every year, when each employee is having to seek approval, keep track of their days away from the office and report it to payroll, it can make the payroll process more complex.
In some instances, companies are doing away with accruals altogether, particularly big companies like Netflix, Groupon and more. We aren’t suggesting you let your employees play hooky 50 percent of the year, but as long as employees are working hard, growing the company and in their personal professional endeavors, and aren’t away from the desk more often than not, tracking accruals may not be all that necessary. It would save a lot of headaches in documenting every single doctor appointment, sick day, vacation day, etc.
If keeping a formal accrual process in place is important to the company culture, do so in a way that is quickly documented. Several online tools make the accrual process very simple to handle for the payroll team or an outsourced payroll provider to calculate.
Myth 4: For taxes to be filed accurately, and for employers to be in the know, taxes should be completed in-house
FACT: Taxes come around each year with new regulations, new forms, new expectations and more complex issues to handle. What this means for an employer is added stress. No one wants to turn in taxes late or incorrectly, because the result could come at a high cost.
To avoid inaccuracies, time spent educating employees on new tax laws, and to ensure you are compliant with all government expectations, employers should seek out an outside source. Payroll providers are extremely educated on all tax changes and able to relay the information to valued employer clients in a less overwhelming manner. Payroll partners make sure that all employees receive the appropriate forms, all paperwork is completed accurately and promptly, and remain in contact with employers and government officials to ensure a smooth tax season.
Payroll doesn’t have to be difficult; as a matter of fact it should be the simplest part of running a company. It’s the easiest necessary function an employer can pass along to someone outside of his or her workforce. The overall goal of a company is to offer products, services or ideas to clients. To free up the time, money, energy, and stress in-house payroll can bring, consider working with a trusted payroll partner like BenefitMall. We can handle all your payroll needs in more ways than you can realize.
Contact us today and we would be happy to discuss all of our various resources, tools and time-freeing knowledge.