All businesses need to have a system in place to manage their payroll activities. However, many businesses end up making mistakes while managing the different elements of payroll, which includes paying employees, filing the relevant government forms, and paying taxes. If you run a small business, be mindful of these 10 common payroll errors.
- Missing State and Federal Deadline
Maintain a calendar to report and deposit payroll taxes to federal as well as state agencies. Late deposits incur penalties and interest charges which small businesses cannot afford. Hiring payroll services in Santa Rosa will ensure you never miss a deadline and avoid getting penalized.
- Misclassifying Employees
Many small businesses hire consultants and temporary employees. It is essential you correctly classify your employees since it plays an important role when reporting, depositing, and filing taxes.
- Forgetting to Send 1099 Form
If independent contractors earn $600 or more in a calendar year, they should receive the 1099 form from you by January 31st of the following year. Many small business owners forget to send out these forms, wreaking havoc on payroll reporting and taxes.
- Not Maintaining Records Properly
One of the most common problems is not matching the employees’ names to the correct Social Security numbers. This mistake, along with incorrect data entries, can cost you time and money. You can avoid this hassle with the help of payroll services in Santa Rosa.
- Not Handling Court-Ordered Payments the Right Way
Some employees may need to pay garnishments, child support, and levies on court order; and usually, these payments are deducted from the payroll. It is imperative to handle and send these payments to the right recipient.
- Making Mistakes in Overtime Pay
You need to follow the guidelines to a T when calculating overtime. Any mistake can prove to be expensive as employees can sue you. With the right help from Santa Rosa payroll services, you will not have to worry about this happening.
- Being too Dependent on the Payroll Software
While there are efficient and effective payroll software, you should not be too dependent on them as they will provide figures based on the data entered. So, if data entry is incorrect, the results will be wrong.
- Not Keeping Payroll Records
Most small business owners are pressed for time, and they may forget to maintain payroll records. Remember that timesheets, W-4 forms, and canceled checks have to be properly and safely stored for four to six years.
- Not Maintaining Confidentiality
You should not disclose payroll details to anyone and make sure that your data is stored in secure servers. Breaches and lack of confidentiality will have an adverse effect on your business that could prove to be catastrophic.
- Not Having a Back-up Plan
If the person handling payroll is on holiday or sick, you still need to pay employees and deposit taxes. You need a back-up to ensure payroll processes occur seamlessly each month and are not delayed by a person’s absence. If you do not have the right resources, it can be stressful, but using efficient small business payroll services in Santa Rosa means you have no reason to worry.
If you are looking for efficient bookkeeping services in Santa Rosa, look no further than Virtual Jeannie Bookkeeping Services Inc. Call us today at 707-664-1425 for more details on pricing and services offered.