Running payroll is an integral part of your business – and certainly, something your employees rely on. Payroll must be completed without errors each time, or you can end up with several very annoyed people, and some real problems on your hands. Any payroll challenges that may occur need to be tackled quickly and efficiently to maintain a productive workplace.
If you’re new to employing staff, running a payroll can induce a cold sweat. To learn more about the issues for those with a growing business that finds itself considering the best way to handle payroll, we spoke to Donna Obstfeld (FCIPD), who has over 20 years’ experience in People management. She owns and runs DOHR, an agency that helps businesses with their People needs. We also spoke with one of Sage’s payroll experts, Todd Black, who has over 20 years of Human Capital Management and payroll experience.
The fundamental knowledge you need for running payroll for small business
There are several solutions for running payroll, says Donna, but regardless of which is chosen, there’s no getting away from having a fundamental knowledge of the legal requirements, and knowing exactly what’s required. Whether you are doing the payroll yourself or having someone do it for you through outsourcing, having a basic knowledge of the regulations is important.
“You need to know what questions to ask,” she says, “and you need to know enough to challenge when things do not look right. Some of our clients Google it and get half the story, or they will get the whole story, but then they will decide they do not want to do it as they should.”
So, here we have a few pieces of advice for business owners running payroll:
Tip #1: “Googling isn’t enough – and might prove to be a disastrous false economy”
“People tend to consult us for the first time when they are in crisis,” she adds. “And that crisis is usually formed because they have done something wrong. So, nine times out of ten it is because they did not even realize they were doing it wrong. They did not know what they did not know.”
Organizations like the American Payroll Organization offer training courses, she explains, and a good idea is to sign-up to things like email lists from such organizations so you can keep an eye on industry updates and legislation.
Tip #2: Consider having someone else do the work
Outsourcing payroll is also an option for a small business. They can decide not to do it themselves. Many bookkeepers and accountants offer such a service, as do dedicated payroll bureaus. Most companies will also deal with employee’s inquiries, and keep ahead of legislation such as new tax laws.
Outsourcing your payroll allows you to remove the hassle and time-consuming parts of the process.
“Most small to medium-sized businesses would prefer to rely on the experts when it comes to running payroll, compliance, regulations, and reporting,” adds Todd. “This is accomplished by providing your time data to an outsourced vendor and letting them do the heavy lifting for you.”
The joy of hiring an outsourced vendor to do your payroll processing is that they usually can do your check printing, tax filing, and garnishment processing as well, which eliminates the stress and allows business owners to concentrate on running their business.
Tip #3: Vendor’s knowledge + your insights = Success
“You are providing a set of numbers,” says Donna,” and they get crunched, then something comes out at the end. You have got to be able to say, “Right, I trust this totally and completely.” It is about knowing what to ask.”
In summary, she continues, “if you are going to run a business, then you never stop learning. And as a business person, you are your own operations person, you are your finance person, and you are your administration person. And even when you outsource that stuff or use the software you still need to make sure that you are getting the results you expect and the return on investment you expect.”
For specific advice that relates to your business needs, please consult with a certified payroll professional.