As a small business owner, there’s rarely enough hours in the day to take on your to-do list. You’re most likely handling sales, HR, marketing and customer service many days of the week. This doesn’t even cover the amount of back office tasks that you need to juggle just so all bills are paid, employees are compensated, and taxes are filed — and all of these are before you actually take on the work of attending to your clients!
With all of the various work going on, it’s definitely a challenge to direct your energy on the most important tasks at hand. Giving the appropriate focus on the payroll process is a must, because a small mistake can have major effects. The good news? Many of the common small business payroll mistakes can be avoided.
Issue: Proper Setup Of Payroll
With the right setup, payroll success is guaranteed. It’s critical that you know what’s required of you and your business when it comes to compliance. But with so many regulations and details that you need to track, it’s understandable that slip-ups are made. Many small businesses make the mistake of misclassifying employees accidentally, but this is a big red flag for the government. Forgetting to register for local, state and/or federal tax withholdings is a big no-no too!
Solution: Get to know all the laws, rules and regulations that are connected to payroll. Stay up to date on any changes that could affect your business and employees.
Issue: Falling Behind On Payroll Deadlines
Setting up a payroll process that makes sure you’re on top of all requirements and filings on a regular basis is just as important as setting things up. It’s a big mistake to put payroll lower on your priorities because it might lead to employee complaints due to pay problems, and possible penalties if you don’t pay the right taxes on time.
Solution: Develop a payroll calendar to make sure you never forget an important tax-related day or a pay period.
Small Business Payroll Solutions
Although taking on your own payroll is always an option, there’s more to it than meets the eye. From collecting all needed information from employees to spending several hours each pay period to organize payroll and staying updated with taxes you need to pay and withhold, it can definitely get overwhelming.
Help is available whenever payroll gets too complicated. Outsourcing your bookkeeping, accounting and payroll tasks to experienced professionals like Innovative Bookkeepers means you can have more time to focus on your business.