How Should I Manage My Payroll? 5 Essential Tips for Small Business Owners

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Managing payroll software can be tedious and time-consuming if you don’t use the right tools and techniques. In fact, business owners spend up to 5 hours per tax period filing and doing their taxes.

There’s a better way!

If you’ve been scratching your head and wondering “how can I better manage my payroll?” then keep reading for some great tips.

Get an EIN for Your Business

The very first you need to do before you hire any employees is to register for an employer identification number (EIN). This identifies your business entity to the federal government. You’ll also want to check out your local laws because some states require an EIN as well.

Decide Pay Schedule

Next, you’re going to want to decide how often you want to pay your employees and when you want to pay them. Some jobs pay every two weeks on Friday, other jobs pay weekly on a Monday. This is completely up to you and depends on your business.

When deciding this you’ll want to consider who is managing the payroll because if it is completely you determine if you have the time to pay weekly, or if paying bi-weekly will be more manageable.

Clearly Outline Payroll Policies

Once you know how often you’re paying employees and when you are it’s important to establish and execute a standard payroll policy. This policy should include how payroll works, where to track time, when people will get paid, what the payroll period is, and how overtime or time off works.

By establishing this early you ensure that all employees are on the same page and completely understand the rules.

Use Payroll Management Software

One way to make payroll easy peasy is by investing in payroll management software. These will help you manage your employee’s payrolls and make it easy to pay them on time.

Features you’ll want to consider using in a payroll software are:
  • Time tracking
  • Integration with current systems
  • Excellent customer service
  • Cloud-based
  • Simple and easy to use
  • Robust reporting

A lot of payroll software solutions even offer a payroll stub template for you to easily get started.

Maintain Records

By law, you have to maintain and store payroll records. Be sure to understand your local and federal laws.

Understand that for current employees you must keep records for at least three years. For ex-employees however, there are different laws about disposing of records after they’re terminated that you need to understand and consider when creating your payroll policies.

Confidently Say “I Can Manage My Payroll Myself”

Congratulations! If you’ve gotten this far, you now know you can confidently claim “I can manage my payroll myself.” Not only can you manage your own payroll, but you can also do it faster than ever before.

If you have other business owner friends, share this article with them so they can confidently manage their own payroll as well.

Read More: Top 5 Reasons to Integrate A Mobile Payroll App [Payroll Guide]

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