Payroll is considered as one of the most important aspects of business. Although there are several reasons behind it, compensating employees without errors, for their contribution of skills and expertise to the business at the right time is the main reason. With busy schedules and the workload on every employee or worker’s shoulders, errors in pay calculation tends to irritate employees. This is because then they have to contact their HR department, write applications, which is a standard procedure almost in every large business. Sometimes it takes longer to correct the errors in a payroll system, and this practice de-motivates employees over time.
Payroll activity in a company handles all financial records related to wages, salaries, bonus and deductions. Almost all companies are changing from the traditional method of recording payroll activities in a book to managing payroll using professional software. This article will shine some light on the different ways effective payroll can be achieved.
Payroll Software or Accounting Software with Payroll
This way of executing the payroll function is known as “in-house” payroll. The department performing the payroll function is responsible for all the maintenance of software through updates, amending tax rates and referring to tax tables. This way high efficiency in calculations is maintained and helps eliminate the glitches in payroll system. Timely execution of generating checks, tax return filings, withholding taxes, payroll tax payments, transfers to superannuation funds etc. are some of the main duties of payroll. In performing these duties, a professional that has knowledge of accounting as well as payroll laws should be preferred.
This is known as outsourcing where the company hires an outside firm to perform their payroll activities. This way of managing payroll requires effective communication between the hiring firm and the service provider. The information to be shared includes:
- Each Employee’s Hours Worked
- Names of Terminated Employees
- Rate of Wage Calculation
- Superannuation Amount Transfers
- Other Related Information
Communication can be done over a short telephone call or email but transferring the correct information clearly through any medium is the key to eliminate any glitches in the execution of payroll. The payroll service has its own software, so set-up costs and maintenance activities are their headache and not yours.
Online payroll is similar to outsourcing but differs in the way it operates because all payroll activities and other information are communicated through the internet. Online payroll can be managed two ways, from either the provider or the client but managing the software and preparation of tax tables and updates are all the responsibility of the provider. This method is satisfactory for those businesses that are familiar with online banking because their data is placed on secured servers and transferred with strong encryption making internet payroll highly reliable.
To help you make the right choice, here are some benefits of outsourcing payroll:
- Outsourcing is Cost Effective
- Helps Avoid Small Business’s IRS Penalties
- Easily Usable and Understandable
- Outsourcing Takes Care of 1099 & W-2 Forms
- Let’s you Retain Control
- 1st Month Free
SK Financial in Tampa has the best solutions to your payroll inefficiencies. We offer our payroll services from as low as $55 a month.