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Whether you've got one employee or 50, if you need to pay an employee of your business,
creating an effective payroll system sooner than later saves you headaches down the road.
Besides making it easier for time tracking, a payroll system adds professionalism and makes
work life easier for you and your employees. Of course, adding a proper payroll system also
helps with your taxes and meeting federal and state regulations. The following tips from
Jazmin Guerrero tell you all you need to know about how to implement a payroll system for
your small business.
Why Use a Payroll System
Payroll is a vital component of almost any business. Most companies, even the smallest
startups, hire employees and contractors. Yet, some companies, especially if they’ve had
some trouble financially, hold off on integrating a payroll system into the business. However,
one of the biggest perks of adding the right payroll system into your business is how much
simpler it makes running your business.
It can be tricky at times to find reliable employees. However, attracting employees becomes
easier with a payroll system in place. Especially with a startup business, potential employees
can see that you're in business for the long haul when you've got a payroll system in place.
In addition, a payroll system makes team management much more straightforward. While
setting up your system the first time takes a few steps, it's usually simple to add or remove employees afterward.
When Is the Right Time for a Payroll System?
Obviously, running a small business requires you to save money where you can. However,
sometimes you need to make room in your budget to hire help. To that end, many small
business owners do much of their advertising on social media and use help like a free logo
design program to save money wherever possible. You can still build your brand while
investing in the staff you need.
If you’re thinking of hiring employees or even have a single employee, it's the right time to implement a payroll system. It's easier than you might think, and the benefits far outweigh any negatives. Running a successful business long-term often involves hiring employees and contractors, but it doesn't have to be complicated or expensive.
Running Your Payroll System
There are essentially 6 steps to running payroll:
1. Obtain a Business Number (BN).
2. Collect your employees’ tax information.
3. Establish your payroll schedule (e.g., weekly, bi-weekly, monthly, 1st and the 15th of
the month, etc.).
4. Using your employee timesheets, calculate the hours worked, overtime, sick, and
holiday pay required, plus local and federal taxes.
5. Pay your employees.
6. Prepare and file your taxes.
Integrating Payroll Into Your Business
The old school way included a pen, paper, and a calculator. The newer school, but still
challenging method uses an Excel spreadsheet. For maximum efficiency, the modern-day
startup uses an electronic payroll system.
It goes without saying that most business owners are experts in the product or services they
sell, not human resources skills like payroll. But, with the internet on your side, payroll
systems integrate with your other business software, including invoicing, timesheets, and
additional reporting needed for your bookkeeping. Plus, many software applications offer a
mobile app so you can tackle payroll anywhere.
Whether you're a seasoned sailor in the business world wanting to expand on their
expertise and leadership, or somebody that's just starting and isn't sure where to
begin, an experienced consultant like Jazmin Guerrero can help! Contact her today
to get started.
Credits to Cody MacBride of Tech Dec
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