5 Reasons To Reevaluate Your Payroll Process: A New Year’s Resolution
It’s easy to lock yourself in when you’re running a business. Sometimes all you can worry about is your bottom line, hiring the right employees, or just putting out the fires that occasionally pop up. But with a new year just around the corner, now may be the perfect time to sit back and ask yourself if there’s anything that needs changing for the upcoming year.
One thing that many business owners overlook is their payroll process. The truth is that you aren’t married to your payroll process from last year. Yes, you read that right. You can change your payroll process anytime, although certain times are better than others. Lucky for you, the end of the year is the perfect time to reevaluate your payroll process.
Reevaluating Your Payroll Process At The End Of The Year
One great thing about switching payroll at the end of the year is that you’ll have knowledge on your side if you decide to make the switch. You know what worked and what didn’t the past year, and you can predict the problems that may show up again if you don’t make changes. Does running payroll take up too much time? Did you spend too much money on software? Were you flooded with mistakes and employee complaints?
It’s time to put those problems behind you and think about changing things up when it comes to your payroll.
Reasons To Take Your Payroll Back To The Drawing Board
Let’s face it: Even in the best of times, running a business can be challenging. You juggle so many things every day that it can be difficult to know what to focus on. One thing is for sure—there’s absolutely no reason to throw an inefficient or confusing payroll process on top of everything else. No reason at all.
A lot of the time, a payroll process can give you trouble simply because it doesn’t meet your needs. If everything’s worked out in the past, great. But in the business world, things can change on a dime. Maybe your business is growing so quickly that you can’t keep up. Or, your budget has changed, and you can’t afford your previous payroll system. Whatever the case, you’ve got to change with the times. Otherwise, you’ll get left behind.
So, should you change things up? Here are five reasons you may want to reevaluate your payroll process for the new year:
1. You Process Payroll Manually
Manual payroll may sound like the perfect way to save money. But between payroll mistakes and a growing team, manual payroll can become a nightmare.
Making sure that hours, wages, contributions, and taxes are correct will suck up your time. And if you’re wrong about one thing, that mistake will bleed into everything else. Payroll will take even longer.
What are the top problems you can face with manual payroll? Manual payroll processes:
- Can take up too much of your time
- Lead to mistakes
- Increase the chances of penalties
2. Payroll Mistakes Are Holding You Back
Depending on your payroll process, last year may have been a year of payroll mistakes. There are plenty of possible mistakes to worry about, like:
- Misclassifying workers
- Miscalculating overtime wages
- Filing payroll taxes incorrectly
- Using the wrong payroll frequency
These aren’t just simple mistakes. Depending on the problem, you may have some legal troubles to worry about. Take incorrect payroll taxes, for instance. Failure to deposit payroll taxes can come with fines of up to 15% of your unfiled deposit.
If your current payroll process led to any mistakes, it may be time to rethink things.
3. You Don’t Use Payroll Automation
Plenty of payroll tasks are the same pay period to pay period. If you haven’t already, you may want to take advantage of automating those tasks. Payroll automation can help you streamline:
- Tax withholding
- Employee payments
I should warn you that payroll automation isn’t full-on autopilot. If you’ve input the information incorrectly, you’ll get incorrect returns. But once you’ve got your employee information squared away, you can put your feet up and check one more thing off your list.
4. You Don’t Offer Direct Deposit
There’s nothing more fun than the mad dash to replace a lost employee check. If your payroll process doesn’t include direct deposit, you know exactly what I’m talking about. Paper checks can get lost, misplaced, or damaged as quickly as you print them.
Direct deposits can side-step these issues. Put employee wages into their bank account without any hiccups. Direct deposits are safe, convenient for everyone, and easy for you.
5. Incorrect Employee Information Is Common
Again, your payroll process is only as good as the information that goes into it. The trouble is, there’s plenty of information to get wrong. Tax rules, tax rates, employee hours—this information can change. Incorrect information is the last thing you want to worry about when it comes to your payroll process.
Here are some things you need to stay on top of:
- Employee tax forms
- Employee classification
- Changes in tax rates
- Employee hours
- Overtime hours
You know your payroll process better than anyone. If you’ve had some trouble with incorrect information, there’s a chance that your payroll process is to blame.
Payroll Software Features
When you find the perfect payroll solution, you’ll know it. It will fit your business needs and save you time and money. And those headaches that used to happen whenever you ran payroll? (Remember those?) They’ll disappear.
What makes a good payroll match? One thing comes to mind first: Features. Features. Features. Let me say it one more time. Payroll software is only as good as its features.
So, what are the features that should be on your radar?
- Easy setup. You’ll want a payroll system that’s easy to set up. No reason to waste time with complicated systems or bring on new headaches so early in the year.
- Accurate tax filings and deposits. The perfect payroll solution will file and deposit taxes for you. And better yet, it will guarantee accuracy. That means no more juggling payroll taxes or panicking when you see a news article about tax rate changes from two months ago. Look for software that handles your taxes, automatically updates tax rates, and does your year-end W-2 and W-3 filings for you.
- Integrated automations. Collecting timesheets, dealing with employee documents, and keeping track of workers’ compensation by hand? That’s so 2022. With payroll software, you can integrate time and attendance, so you don’t have to chase down employees for their hours. Employees keep track of their hours, and your payroll updates automatically.
- Employee self-service. With employee self-service, employees can change their personal information, review benefits, look at their time cards, and print their payroll information. Employee self-service is a great way to stay up-to-date on your employee information.
- Customer support. Top-of-the-line customer support is critical for your new payroll process. You’ll want to make sure someone has your back if you have questions or if something goes wrong. Customer support should be easy to get a hold of and knowledgeable about the product. Look for free customer support with excellent and consistent customer reviews.
- Price. The best payroll software is useless if it doesn’t fit your budget. Look for software that fits your needs and doesn’t break the bank.
Payroll Software In 2023
If your payroll process for 2022 was a disaster, try not to fixate on the past too much. Hindsight’s 20/20, right?
Now’s the time to get on the right track. Your payroll process for 2023 should be simpler and more powerful than ever, right? Absolutely. The right payroll software can make that happen.