6 Mistakes With Payroll Management and How to Avoid Them

In June of this year, payroll employment rose by 850,000. If you have a payroll team, now is the time to focus on them as jobs are always open.

When you have the right team of payroll professionals with you, your business avoids mistakes with payroll management. Learn the six mistakes your team should be aware of and how to avoid them.

1. In-House Payroll Processes

One of the mistakes with payroll management that you don’t want to make is carrying out the payroll process manually and through an in-house team. If you use a manual system, a lot of paperwork is necessary.

Among the payroll staff being overworked, they are more likely to make mistakes creating more payroll issues down the line.

If you do swear by having an in-house team, make sure they are not overstaffed. Consider using a paystub maker as well.

2. Not Organizing Documents

A basic tip on how to manage payroll is to keep all documents as organized as possible. As a general rule of thumb, you should create a uniform filing process that every payroll staff member is aware of.

If you must store and organize checks at your place of business, you should keep them in a centralized location along with other payroll documents.

3. Mismatching Software

Not every payroll program is going to be compatible with the systems you have in place at your company. An example of this is when the profile and records system is different from the system used for payroll and benefits.

Mismatching software leads to errors and mistakes that are going to take a lot of time to correct. For those working in payroll, this could slow their performance.

4. Not Following Laws

Paying employees and contractors involves having a payroll management strategy. Without following the state and federal laws, especially those that apply to deductions, you are going to run into a lot of issues.

Every business knows that employee payroll deductions are the hardest area of payroll. Smaller businesses and HR departments, in general, are at a greater risk of making mistakes.

5. Not Checking for Regulation Changes

Payroll rules and regulations don’t always stay the same. In fact, you can bet that they will change at least once a year. Always be aware of the information that comes with state and federal changes.

6. Making Late Payments

Avoiding late payments should be a major goal for every business. On the 15th day of the month, tax deposits should always be made.

If payments are late, the IRS charges penalties and fines. Tax deposits that are extremely late might have a 25% penalty.

Mistakes With Payroll Management Every Business Should Avoid

Mistakes with payroll management can lead to employee satisfaction problems and issues with the entire company. When you choose the correct payroll function, you’ll benefit from savings and peace of mind.

When you follow the tips outlined in this guide, your payroll process will run as smoothly as possible.

For more business financing advice, check out the other posts on our blog.

Interesting Related Article: “How To Decide Whether You Need A Payroll Software Or A Payroll Service?