Payroll Management Process, Payroll Methods & Solutions

Fortunately, many payroll solutions offer built-in standard reports that employers can use for their recordkeeping purposes. With Zoho People, for example, it’s easy to store and manage employee documents from within one centralized platform. Many HR and payroll software tools offer employee portals so that employees can adjust any information themselves. Before you can start the payroll process, you need to collect all of the relevant employee information to feed into your payroll software so that it can conduct accurate calculations. While federal requirements don’t dictate how to store these records, the IRS recommends that you keep the data well organized — such as by fiscal year — and safe from threats like flooding. Some states have additional rules about how and where the records can be kept.

The laws and regulations in your area of operations can change over time, increasing your chances of non-compliance. Clockify is a time tracker and timesheet app that lets you track work hours across projects. If you have an HR manager, it would benefit your business to connect them and the payroll manager. Although many of you reading this probably know which documents are needed for payroll, it’s always good to refresh your memory. Besides, it helps solidify the schedule, so the process is easier. Know which payroll records you need to maintain to adhere to IRS and DOL requirements, and how long you need to keep them.

Payroll4Free

Start by calculating the number of hours an employee has worked in a given pay period, and take note of overtime hours. The extra time has to be paid out at a higher rate consistent withfederal law. If an hourly worker puts in more than 40 hours per week, you’ll have to pay time and a half, or an employee’s hourly wage plus half that wage.

• Payroll for your company doesn’t have to be an impossible task.
• With a calendar, you can plan your time more effectively and limit stress related to payroll tasks.
• One often overlooked key is to provide your employees clear, written explanations of your policies and procedures.
• Even these three tips alone could be enough to stay updated for your small business.

In smaller organizations, these inputs are received from a consolidated source or fewer teams. However, in a larger organization, the task of gathering data may look overwhelming. If you are using a smart payroll system having integrated features like leave and attendance management, employee self-service portal, etc. inputs collection process does not remain a problem.

Using payroll services

It might be tempting to dip into your payroll tax funds if your business is short on cash. However, borrowing from your tax fund would be a serious mistake that you should avoid at all costs. Creating a standard payroll process will improve your payroll team’s productivity. It can also lower your risk of making payroll mistakes, making your payroll department more reliable.

You can skip this section if you don’t have all the required information, but you will need to fill it out later to ensure accurate tax filing. This is a general road map that encapsulates how to both set up your payroll system and process payroll. If you’ve created a system that addresses all these needs in an organized fashion, you’re on your way to successful payroll.

Step 6: Set up payroll taxes.

Typically this module is used to How To Manage Payroll time spent on projects or specific activities. There are always ongoing tasks that need attention and a constant need to monitor changes to withholdings, contribution to social security funds, etc. The entire process can be split into three stages, pre-payroll, actual payroll and post payroll activities. Choosing the right payroll software for your small business can… You will need your business information to complete this section.

If you are offering your employees a direct deposit payment option, you will need to link your bank account with QuickBooks. It will request standard information such as your business’s name, type, email and physical address, phone number, industry, and principal officer’s name. Depending on the number of employees you have, setting up payroll for the first time in QuickBooks can be time-consuming.

Keep Track of Your Cash Flow

Your payroll software usually withdraws enough from your bank account each payroll cycle to make these payments on time. Implement a time clock software that integrates with your payroll software to avoid having to manually enter each employee’s hours. Aside from time tracking, all of this information goes directly into your payroll software. Payroll software saves business owners countless hours in clerical gymnastics. Though software relieves much of the burden, business owners still need to know how payroll works to correctly set up their software and detect errors. In payroll records, you must keep documents like the employee’s Form W-4, pre-tax and post-tax wages, and total hours worked each workweek.

IRS regulations require you to keep all payroll tax records for a minimum of four years. Violations can result in costly fines from the Labor Department, IRS, and state agencies. When it comes to payroll, there are federal and local authorities with diverse, country-specific rules and serious penalties. Moreover, European labor legislation is quite intricate — it’s quite hard to keep up-to-date with the law permanently. So, HR and legal departments are caught in the middle and have to comply with all requirements on different levels.

Payroll Funding Can Help Your Growing Business

If you are unsure of your state’s laws, consider contacting a CPA, attorney, or insurance agent to meet compliance requirements. This template, which is free from Microsoft, has everything you need to process payroll. You may need to add or delete columns or edit column names to customize the template. Collect employee financial information like W-4 and 1099 forms. Once you’ve calculated net pay for each employee, pay each one by their preferred payment method, if you can. Running payroll can feel intimidating to a business owner who’s never done it before.