Managing payroll is one of the most critical aspects of managing your workforce. But payroll is about more than processing regular payments to employees for the hours they work. It also requires compliance with a range of labor and tax laws. If your payroll process isn’t set up for maximum efficiency and compliance, you can potentially risk penalties levied by the Department of Labor and the IRS. Moreover, payroll errors can negatively impact your employees’ morale and engagement.
Managing payroll effectively requires having the people, processes, and technology that help you achieve accuracy and timeliness in employee pay. However, if you have experienced any of the following scenarios, chances are your payroll process needs improvement.
3 Telling Signs You Need Help With Your Payroll Process
Considering that payroll is likely your organization’s largest expense, managing it for efficiency and accuracy is critical. But, if you are relying on spreadsheets or a legacy system that doesn’t help you meet IRS deadlines or incorporate best practices into your payroll process, you could be wasting time and money.
Here are three top signs you probably need help managing your payroll process:
You lack a formal payroll policy
Running a biweekly or semi-monthly process and delivering paychecks on time represent only the bare minimum required to operate a payroll process effectively. You also need to have a clear process for managing the inevitable exceptions that crop up throughout the year.
In a Deloitte employer survey, 74 percent of businesses said they had a fully-documented pay policy. If you don’t currently have one, it’s not too late. By creating a payroll policy to guide both everyday and less common payroll actions, you can develop clear processes for managing activities such as:
Employee paycheck errors are common
Payroll errors can be highly frustrating for employees and can cause them to experience undue financial hardship. Possible errors can include the following:
Not only can paycheck errors make it more difficult to run accurate payroll and tax reports for the IRS, but they can also create an employee retention problem within your workforce. One employee survey found that nearly half of employees (49 percent) said they would start a new job search after experiencing just two payroll errors.
You miss important payroll deadlines
In addition to the quarterly payroll reports you must file with the IRS, there are other payroll deadlines you need to track throughout the year. For example, if you employ at least 5o employees, you also need to submit IRS Form 1094-C as part of your annual reporting under the Affordable Care Act. If you’re not consistently meeting these critical deadlines, your organization may be subject to costly IRS penalties.
How to Improve Your Payroll Process
For many businesses, managing payroll is challenging, not just because of the tax reporting requirements but also the variables impacting employee pay. The combination of regular pay, overtime, and special payments such as bonuses and commissions can open the door to an array of errors and inconsistencies.
To improve your payroll process and avoid errors that can negatively impact your employees and your bottom line, it’s advisable to work with a trusted HR services provider. A committed and reliable partner can manage your year-round payroll activities and ensure you meet applicable reporting and recordkeeping requirements.
Here are just a few of the payroll benefits and services you can expect from your outsourced HR services provider:
Run a Better Payroll Process
Given the importance of payroll to the successful management of your workforce, you shouldn’t trust it to just any payroll vendor. By outsourcing your payroll function to a full-service HR outsourcing provider, you can get the peace of mind that your payroll needs are being met and your employees are being paid on time, every time. To learn more, contact us to see how MarvelHR makes a difference for our clients.