Payroll can be a juggling act for most people. However, it can be exponentially more difficult when you’re just starting out. Unfortunately, there are so many different rules and regulations in this field that at times, it can be difficult to determine where to start. Fortunately, this is where payroll software can come in handy.
In many cases, SMBs either end up outsourcing the entire payroll process because they don’t have time nor enough resources to manage it themselves. However, if your startup has grown beyond 5 people, it would be best to invest in payroll software so you can devote more time to growing the business.
While handling payroll can seem like a tricky feat, nothing can be farther from the truth. If you want to manage your payroll accordingly, you first need to know the truths behind some of the most common payroll myths. For starters:
Payroll Myth #01: To Compensate Employees, You Need Physical Timesheets
Time sheets are a thing of the past, and digital time tracking systems have made them obsolete. Timesheet errors can result in lost hours for your employees as well as financial loss if they’re used fraudulently or inaccurately by malicious people.
Timesheet software helps streamline payroll processing by recording employee hours more accurately than ever before with an easy-to-use interface that also integrates seamlessly into many business applications like accounting or scheduling programs.
Payroll Myth #02: You Need to Remember an Exact PTO (Paid Time Off) Quota
Paid time off or PTO is a flexible benefit that many companies offer. Tech giants like Netflix and Groupon do away with formalized accruals, while other companies offer unlimited days of vacation. It’s advised to have some sort of documentation in place without making the process too cumbersome for the employees.
Payroll Myth #03: Payroll Vendors Don’t Work With Small Businesses
In the past, companies had to rely on large and unwieldy systems for them to get their payroll going. These days, you can take a company from 5 people all the way up to 1,000 with today’s modern payroll software providers. That said, it is reassuring to know that small businesses now have easy access to payroll vendors unlike before.
Payroll Myth #04: Payroll Don’t Need to Be Formalized When Using Independent Contractors
With the gig economy becoming increasingly popular, small businesses are relying on contract workers more. Contractors still need to be paid regularly and given W-2 forms at year end in addition to filing taxes with the IRS. This is where a great payroll software can come in handy.
Payroll Myth #05: Doing Payroll is Easier If You are Small Company
Regardless of the number of employees, the hurdles and procedures in most companies remain the same. Let’s say you have a 20-member workforce comprised of interns to senior managers and strategists, each member of the group will require individualised attention.
Payroll Myth #06: The Right Employees Can Address Taxation Concerns
SMB-owners often believe that by selecting the right employee or hiring only from a known talent pool, they can cushion any fallout caused by non-compliant payroll. The truth is very different—even loyal employees are unlikely to report violations and eventually leave if their paycheck isn’t issued on time with regularity.
Payroll Myth #07: Employees With Less Than Ten Employees Follow Another Set of Rules
The federal government has set aside a number of rules for how businesses need to handle their employees. Regardless if you have one, five or fifty people on staff–every company needs to follow these guidelines no matter what industry they work in.