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Payroll Management Optimization: 8 Strategies for a Successful Business

Managing payroll is a major part of running a business. Although it may seem daunting at times, it is important to take a good, long look at your company’s payroll management to see how you can fine-tune it. We put together a list of 8 payroll management optimization strategies to help your organization with efficiency.

 

 

Payroll Management Optimization

1. Integrate

Leverage technology. These days, integration is practically a must, and that’s true for payroll too. Integrating your payroll system with your other business operation systems streamlines your payroll management by reducing duplicate entry and thereby reducing potential mistakes.  Integration, for example, can involve connecting your payroll with your accounting systems, timekeeping software, HR programs, and benefits management software.

For instance, if your payroll is linked to your timekeeping software and you add or change employee data, you will not need to input this information twice. And when it comes to benefits enrollment, you don’t need to manually enter employee deductions into payroll when you integrate. It will just auto-populate from the benefits admin software. This will ultimately, save you both time and money and not to mention reduce human error.

2. Automate

It’s time to switch to an automated payroll system if you’re still doing manual employee onboarding and keeping paper files. Duplicate entry, manual entry, and data in multiple systems take up too much of your valuable time. Plus, there’s the hassle of losing or damaging paper paystubs.

Payroll system automation offers accuracy and data security. With payroll software, you get automated calculation and payment of regular wages, overtime wages, paid leave, bonuses, etc. In addition, all tax calculations, as well as tax payments, are automatically done for you.

Lastly, because you can automatically generate payroll reports, you save a lot of time and make things just more convenient for your employees, who can get their paystubs electronically.

3. Set a payroll schedule that works

A payroll schedule is not a one-size-fits-all matter. Many industries must pay weekly, while hourly employees must receive payment at least twice per month. Often managing a bi-weekly payroll simplifies the life of a payroll manager as the workweek can closely mirror the pay period.

Ideally, your payroll schedule should be easy for your payroll team to manage and easy for your employees to understand.

4. Keep your payroll reports for at least one to two years – if not longer

It is common to need to refer to older payroll reports, especially quarterly and year-end tax filing reports. With an automated system, your payroll reports are automatically stored for you, ideally in a secure, cloud-based application.

5. Create an official payroll policy that everyone adheres to

Things run just that much smoother when everyone is on the same page. For a complex and vital undertaking like payroll management, it’s best to formalize things by writing and implementing an official payroll policy. The payroll policy should be a standard part of your company’s employee handbook. This gives your company proper documentation as a reference for any payroll concerns that arise.

6. Prepare the budget for employee bonuses ahead of time

Employee Retention Credit

Be sure to properly plan your budget allocation for employee bonuses. Is the goal to pay a bonus each quarter, or only once per year? Ideally, you do your budget planning at least a month before the specific payday. Being prepared allows you to meet any set goals regardless of any obstacles that may arise along the way.

7. Don’t make payroll a one-person show

Avoid being dependent on just a handful of employees—or worse, just one—for payroll. The reason is rather obvious. They won’t be around always and/or forever. Someone should always be able to step up to do the job just as well.

8. Hire a payroll service to create a payroll management optimization strategy for you

Among several reasons why you should, is that a payroll service saves you time and money, and lets you finally do other important things. A focused payroll team will let you focus on the big picture for your business.

Handing your payroll tasks over to a team that specialize in payroll and HR management takes a load off your team while allowing you to save on the cost of hiring additional personnel should the workload prove unmanageable, or, heaven forbid, in the wake of costly errors. So, find a great payroll service provider who can work seamlessly with you.

Ready to take your payroll management to the next level? Explore Payroll Systems’ easy-to-scale integrated and automated HR and payroll solutions, backed up by a dedicated payroll specialist.

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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.