The First Step to Payroll Efficiency: Analysis and Documentation

Payroll software for small business is often touted as a 'magic pill' for transforming outdated payroll systems overnight. Truth be known, new software alone rarely gets the job done. Legacy payroll systems have to be rebuilt from the ground up. The first step in doing so is one of analysis and documentation.

Yes, suggesting analysis and documentation might be causing your eyes to roll back in your head. The last thing you want is for your company to go through another prolonged period of analysis only to come out the other and no better off than when you started. But trust us when we say there is a difference between genuine, essential analysis and wasting time gathering useless data.


Know What You're Doing

Streamlining payroll to make it modern and efficient is not possible if a small business doesn't know exactly what is being done in the here and now. Therefore, you have to know what your company is doing if you expect that new payroll software to accomplish something.

You have to know how time and attendance are tracked, how working hours are calculated, how wages are calculated, how and where records are kept, how taxes are withheld and paid, etc. In short, you need to know every detail about payroll processing in its current form. Furthermore, you need to document those details.

Documentation is necessary to keep track of what you have learned over time. Otherwise, some of the information you gathered at the start of your analysis may be lost six months later when the analysis is complete. If you are not going to document, you might just as well not attempt to improve payroll efficiency.


Learn What Can Be Improved

Once you know what your company is currently doing, you can set about analyzing what aspects of your payroll system can be improved on. Let us use time and attendance tracking as an example. If you know your company is using a legacy system involving paper time cards and a punch clock, set out to discover whether that system can be made better or not. You will find it can be.

As part of this process, document your options. Consider digital time clocks, computerized time and attendance tracking, cloud solutions, and so on. Document each option so that you know what it offers.


Determine a Course of Action

The analysis and documentation phase winds up with determining a course of action. In this phase, you will be getting together with your management team to discuss what your company is currently doing and how it can be improved. The team figures out the next move based on the solutions offered.

It could be that a new time clock and some modern payroll software for small business is all your company needs to streamline payroll. Or you might find that an online payroll solution through a company like ours would be more beneficial. You might even determine to go with a full-service payroll solution that handles everything for you.

Whatever you decide on, document your decision. Then put together official policies for implementing that decision. You want to make sure that everyone involved is on the same page. Only then will you be ready to begin the transition to a new and more efficient payroll system.

This may seem like an awful lot of work just to improve payroll, but putting in the work is well worth it. Making the effort to analyze and document is the only way to make an informed decision that will not come back to bite you down the road.