Money is imperative in every single aspect of a business. This fact usually rings true when it comes to shelling out salaries to your employees. Fortunately, you can take the help of efficient Santa Rosa payroll services to ensure proper supervision and well-handling of your business’ payroll, with nothing forgotten.
Payroll processing actually refers to the management of various financial records of employees, such as wages, bonuses, salaries, net pay, and deductions. Although payroll processing may seem like a simple and straightforward process, there is a lot more to it. From remitting to the IRS, to wage policies and payroll taxes, the payroll processing process is not as effortless as it seems. Things can easily get complicated. Therefore, in order to ensure accuracy, it is imperative that you understand the complete process of payroll processing.
What is Payroll Processing?
You must be aware of the term ‘Payroll’. It actually refers to the total amount of salary that is paid by a business to its employees and other recruits, including contractors and freelancers. So, payroll processing is a significant function for every business – no matter big or small.
It’s probably your business’ largest expense, as well as the most time-consuming HR work that is performed every month. Even though the most common pay length period is biweekly, payroll can be processed weekly, biweekly, or monthly.
As a matter of fact, payroll processing is irrefutably complicated, and the process differs from company to company. Efficient payroll processing requires a well-organized system, proper knowledge, understanding of taxes and current regulations, and careful planning. So, before starting with processing payroll, there are two steps that you need to follow:
- Set up new employees.
- Collect and verify their timecard information.
While processing payroll, it is imperative that you determine how much each of your employees is costing your business, excluding their salaries. So, while preparing paychecks for your employees, make sure to consider these four crucial factors.
- Gross Salary – It is the total amount that your company pays to its employees before any deductions. Deductions from an employee’s pay can embrace retirement plan contributions, insurance premiums, benefits, and tax withholdings.
- Benefits – It is a portion of the total amount that comes from your employees’ gross salary. In fact, most businesses usually cover such costs of benefits.
- Medicare & Social Security – You can deduct medical care and social security payments from the gross wages of your employees.
- Tax Withholdings – Your business needs to hold back each employee’s share of state and federal income taxes from their payroll. In addition to this, it is important for your company to ensure proper calculation of income taxes of each employee, and forward payments to the right government agency on a monthly basis. Your company will also be required to submit payroll tax reports on a regular basis, including a yearly unemployment tax report and a quarterly tax report to the IRS.
After the proper analysis of all payroll reports, you can process payments to your employees. However, manually distributing out paychecks to your employees could possibly increase unnecessary work. Therefore, just like most companies, you can also choose to take advantage of direct deposit to benefit both the business as well as the employees.
Why is Payroll Processing Essential?
Payroll processing is crucially necessary for a number of reasons:
- First and foremost, your company is legally obligated to pay its workers. Failing to make timely payments will eventually ruin your company’s reputation, and make you face legal repercussions.
- Paying your employees accurately and consistently will not only demonstrate the financial stability of your company but also impact your employees’ morale, and safeguard their trust in your business.
- Efficient payroll processing will keep your business compliant with state and federal laws. It is important for you to know that by maintaining compliance, your business can easily lessen risks like fines, lawsuits, and penalties.
How to Simplify Your Company’s Current Payroll Process
As a well-known fact, your company must always get the payroll processed accurately and in a timely manner. However, getting payroll done accurately is often challenging for many small companies and businesses that are experiencing rapid growth. Moreover, getting payroll processed in-house can possibly make the whole process overwhelming.
Efficient payroll processing requires time, proper management, patience, and ongoing communication. Further listed are 7 useful ways through which you can easily streamline the current payroll process of your company.
- Set a Lucid Payroll Policy – Review your current payroll policy, and make sure it’s concise and clear. Your payroll policy must delineate the wages, commissions, and expense reimbursements of your employees.
- Creating a Budget – Creating a proper payroll budget will not only support your payroll plan for future growth but also avoid unwanted surprises for your company. So, be careful while creating or analyzing your company’s payroll budget.
- Categorize Your Staff – Classifying your employees correctly is very crucial for the efficient payroll processing of your company. Failing to do so will not only harm your business but also cause some serious legal as well as financial consequences.
- Set up a Reliable Payment Schedule – No matter whether your employees are salaried or hourly paid, paying every worker on the same day and in the same way will make things easier for your business, and smoothen the payroll processing process.
- Offering Payroll Information Online – Your employees could possibly have questions about your payroll policy. So, you can answer all their questions by providing all essential payroll information online. It will not only simplify payroll processing and save time but also encourage your employees to check these resources.
- Use Direct Deposit – Setting up a direct deposit will ultimately boost the payroll efficiency of your company. Today, most banks, businesses, and account programs support direct deposit because it’s convenient and faster than distributing paychecks.
- Consolidate Your Company’s Payroll Information – Keeping all your payroll documents and records in one location is really a great idea. Knowing where your complete data is saved will eventually give you peace of mind. So, make sure to consolidate all payroll information in order to access it easily.
Virtual Jeannie Can Help with Payroll Processing
Payroll processing may seem like a simple business function, but it’s actually quite complicated and time-consuming. However, you can follow the above-mentioned 7 useful tips to streamline the payroll process of your company. You can also consider taking the help of experts at Virtual Jeannie Bookkeeping Services Inc. at 707-664-1425 to learn more about payroll processing and managing it more efficiently for your company. Virtual Jeannie Bookkeeping is located in Santa Rosa, CA and looks forward to helping you and your growing business!