5 Tips to Success
We understand - payroll can be confusing! As a small business, it can easily become overwhelming to manage your payroll. Software can be expensive - you may not have enough employees to make it worth your while, but you may also have too many employees to be constantly managing payroll yourself. Practical Accounting Solutions understands! That’s why payroll is one of our big 3 services. Today, we give you 5 of our top tips for being practical about payroll so you can focus on running your business!
Tip 1: Consult An Accountant
No, we promise, we’re not just saying that!! Even a one-time consultation can help you on the right path to managing your payroll. When it comes to taxes, it’s not something you want to take lightly, and mistakes can cost your business big time! Patriot Software has a more comprehensive list of questions you’ll want to ask at your appointment, but here are a few of the big ones!
1. What’s the best way to pay my employees?
Depending on your industry, it might seem like cash is the easiest way to pay your employees. That’s fine! Ask us how we can help you create a detailed system of payment so you have records of the cash being paid. More companies opt for direct deposit, and we can help you figure out how to automate the various payroll taxes. At the end of the day, your method of payment needs to be reliable and trackable for the long-run.
2. What should I know about pay stubs?
In Virginia, you’re required by law to provide a pay stub to your employees. This document will have various parts like taxes, gross pay, deductions, and net pay so your employees can clearly see the various aspects of their income. Even better, you can provide your employees with electronic pay stubs. Ask us how we can help you set this up!
3. Exempt vs Non-Exempt Employees
Learning how to correctly classify your employees is another area with big consequences. Let us help you!
There are also some state-specific rules for your industry that you may need to be aware of. Practical Accounting Solutions can help you find solutions and prepare a payroll process with you!
Tip 2: Prepare for Overtime
The federal Fair Labor Standard Act was created to ensure employees are paid for their
overtime. If your employees work over 40 hours a week, they get time-and-a-half pay. In Virginia, we abide by this law only, but other states may have additional legislation. Note in the Fair Labor Standard Act that there are certain benefits and exemptions your employees may qualify for depending on their job roles! The Department of Labor provides more detail here.
Tip 3: Budget Payroll into Your Financials
When you’re offering your employees their package, it’s important that you’ve done the math to ensure it works with your business financials. We can help you account for the taxes that need to be paid plus the wages of your employees. Some of these extras include Social Security and Medicare, plus benefits, raises, or bonuses you offer your employees. Do you provide a stipend for childcare? Can you afford to?
The ability to offer a great package can help you attract top talent, and we can help you factor in those important pieces into your financial plan.
Stay on the conservative side with these numbers, and think about the ebb and flow of your business. Are there seasons of the year that are busier and require more manpower? Will those needs end up requiring overtime from employees?
Considering these aspects can help your business attract top talent while continuing to grow!
Tip 4: Integrate Everything
As you’ve probably learned, business finance is much easier if you keep your records in one
place. By combining our payroll service with our bookkeeping service, we can help you integrate your processes to ensure your cash is flowing smoothly. To integrate your payroll yourself, look for tools with the ability to automate certain aspects of their services.
Tip 5: Create a Payroll Policy
Your payroll policy is an agreement kept with every employee at your company. It serves as a way to protect both you and your employees regarding payroll procedures. This agreement should include:
Wages
Bonuses
Benefits
How Employees Will be Paid
How Often Employees will be Paid
How Employee Hours will be Tracked
Especially in the days of remote working, it’s important to have tools to track employee hours. Tools like MyHours or Quickbooks Workforce have great features for employees and employers to create reports!
Conclusion
Payroll taxes are tricky, but we hope these practical payroll tips helped! For a payroll consultation, contact us today at Practical Accounting Solutions! We can help you integrate your business finances into one place, so you can focus on running your business!
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Disclaimer: The views presented in this post are meant as educational resources and should not be taken as direct advice for your personal finances or small business. Should you have questions regarding a post relating to your specific finances, please contact us at info@practicalaccountingva.com.