Dec 31, 2019

Six Payroll Problems To Keep In Mind

Getting a grip on your payroll can ease the burden on cash flow and help your company remain afloat.

It is no secret that 20% of small business fail their first year, and approximately 50% fail within their first five. Payroll mistakes are a primary contributor to this fact.

As it turns out, payroll is critical, and its success is dependent on other systems required to be in place to make sure everything runs smoothly. Here are six payroll problems you need to consider as you move your business forward:

One: Human Error

Humans make mistakes. Employees enter incorrect hours on timesheets. Time cards get lost. Employees forget to clock out. Supervisors fail to track overtime. Human Resources managers make data entry mistakes. The list continues.

If simple human error was isolated, the problem wouldn’t be such a concern. Human error, however, often causes a domino effect that can cause trouble down the road. Automated time and attendance can help reduce or even eliminate opportunities for human error to affect your payroll.

Two: Missed Deadlines

For most small business, payroll comes too often, too fast.

If you are the typical small business owner, you spend your week worrying about pleasing customers. Operational demands often come as an afterthought and are the reason we spend late nights at work.

Payroll deadlines simply can’t be missed. There are penalties to be paid if they are, and not all of them are financial. There are also federal, state, and local tax filing deadlines to worry about. Automation can help your business save a lot of time in preparation for payroll. Automated time and attendance, advanced scheduling, and payroll integration are key. It also helps to have a competent and professional payroll company to back you up and alleviate the burden.

Three: Compliance

Compliance is a major issue that is often forgotten. It is no simple task, and it requires constant vigilance as laws change and new regulations continue to arise. Compliance with the Fair Labor Standards Act (FLSA) is the most common area of trouble for small business. New Affordable Care Act (ACA) regulations are coming online and need to be considered. Healthcare providers will be burdened with Payroll Based Journaling requirements. The list goes on and on.

It helps to be running your time, attendance, scheduling and payroll on a system that is up-to-date; automated payroll and timekeeping will help alleviate most of these concerns.

Four: Preparing For Audits and Legal Challenges

No one likes an audit and, as a result, few business owners consider the possibility of being audited until it is too late. Preparing for an audit can steal a lot of time from your focus, and doing so without solid recordkeeping can be terrifying.

Getting ready for an audit should be a matter of automation. When you use modern time and attendance tracking, as well as payroll integration, your records are always ready. Our time and attendance software runs in the cloud, so backups are off site and available 24/7. With the right tools, audits no longer have to be a frightening possibility.

Five: Improper Employee Classifications

Incorrect employee classification is a common payroll pitfall. Though it appears simple on the surface, misclassification can coincide with substantial negative impacts on a business.

The three critical classifications for an American worker are:

• Independent Contractor
• Hourly Non-Exempt
• Salaried Exempt
  

The term “exempt” refers to worker overtime protections. Non-exempt employees earn overtime when they work more than 40 hours a week, while exempt employees do not qualify for overtime pay.

Improper classification of an employee can result in fines or non-compliance penalties. Additionally, employees might not receive credit for the right pay scale, resulting in a short paycheck.

Employee classifications are a thing of the past with our advanced time and attendance software. Panacea Payroll can help you get things set up so tracking employee classifications is fully automated, including integration with payroll to maintain the reliability of records.

Six: Cash Flow

Cash flow can sink your business quickly; it should come as no surprise that many of the problems we have discussed have roots in cash flow. When funds are low, owners and managers can become desperate.

Scheduling and time and attendance can have a huge impact on cash flow. Unplanned overtime can sink a business without you even knowing. Overstaffing can drain your budget when income doesn’t match the resources.

Workforce management software with integrated scheduling can help you avoid these problems.

Efficient time and attendance management can help you shave time and increase productivity. With workforce management software doing the heavy lifting, you can optimize your cash flow.

Contact us today to find out how we can help you!