For business owners with employees, payroll is a necessary task that can often takes a lot of time. To make payroll less time-consuming, consider these five ideas:
- Employee Onboarding
For business owners that hire frequently, empower new hires by letting them do their own paperwork. A good payroll system allows employees to “onboard” themselves, completing the I-9, W-4, and direct deposit authorizations electronically, even before they show up for their first day. These systems also make storage of these documents easy and centralized in the event of an audit. Remember, however, that employers still need to ask for ID on the employee’s first working day to verify the information on the forms.
- Integrate Employee Benefits
Rather than hire several separate companies to handle benefits, some payroll systems allow businesses to integrate benefit solutions right in their dashboard. Integrations mean that employers won’t have to re-enter employee data in multiple systems, which can get out of sync. Deductions and payments can also be integrated to save accounting time. Now that repeal of the Affordable Care Act looks unlikely, integrating 1095 reporting (basically a 1099 for health insurance for those who are unaware) with payroll is a huge timesaver. In the first couple years, many companies had to transfer much of their payroll data to another provider who could handle the ACA reporting. If your payroll provider still doesn’t offer this, it might be time to shop around.
- Delegate Timesheet Entry
Require non-exempt employees to enter their own time; all business owners should have to do is review and approve it. The right timesheet application can take care of that, and a great timesheet application will allow employees to enter time from multiple options, including timecard, cell phone, iPad and other devices. There are a ton of ways to restrict fraudulent clock-ins ranging from “geo-fencing” a specific location where clock-ins are performed to requiring supervisors to enter time for their crews, thus taking time entry out of the hands of every employee. The key to know here is there are a lot of options and keep looking for the one that works for your business.
- Eliminate the Annual Worker’s Compensation Audit
Tie worker’s compensation vendors to your accounting system, and you’ll be able to avoid that time-consuming annual reconciliation report required by the worker’s compensation insurance carrier. Or, if letting a vendor have access to the accounting system is distasteful, consider reporting actual payroll on a monthly basis rather than the yearly estimate that most businesses do. This option avoids the upfront deposit as well a potentially large annual true-up because the insurance is paid each payroll cycle.
- Reduce the Frequency of Payroll
It’s not always possible, but if business owners can pay employees less frequently, they can potentially cut payroll time in half. Pay weekly employees every two weeks or pay bi-weekly employees monthly. Simply put, processing a payroll takes about the same amount of time, regardless of the amount of compensation. It might take 10% longer to run a bi-weekly payroll than weekly but the time savings is tremendous. The main issue we see is employees get used to weekly payroll and are very reluctant to give it up even though they are being paid the exact same amount. Some coaching on personal finances, negotiating, or education on budgeting may be needed to make this a reality.
Try one of these five ideas to streamline payroll time and costs in your business. And as always, let us know if we can help.