Regardless of the number of employees you have presently, you should have in place an effective payroll system. Aside from rents or leases, machinery and tax obligations, payroll is probably a major expense of small-medium sized businesses. Like all of the aforementioned expenses, ensuring your employees are paid well and promptly contributes directly to the business’ well-being.
In this post, we’ll discuss the core components of an effective payroll system. If your payroll activities are outsourced, many of the components discussed below would have been taken cared of. To learn more about them or others, speak to a team member today.
1. Log-in important dates and activities pertaining to payroll
As a small business owner, your attention is needed for almost every aspect of the business. Undoubtedly, some will require more of your attention than others, for example, acquiring new clients and driving sales. Given this, it is possible for you to overlook affairs pertaining to payroll sometimes. To avoid this oversight, log-in the important dates and activities.
2. Do you have a payroll communication plan?
One of the contributors to wage or salary disputes is the absence of clear communication. It tends to inflict small businesses more as the hiring process may be somewhat ‘casual’ to begin with. Disputes can be costly as well as demoralising for the business owner and other employees. Avoid it as best you can with a payroll communication plan. It essentially details to employees the figures as well as obligations, for example, payroll tax and superannuation amongst others.
3. Maintain a tidy set of payroll records
If you’ve outsourced your payroll services, this shouldn’t be an issue as your service provider will be required to maintain them. It is good practice to keep the records tidy for future reference or when the need arises, for example, to check on the cost of wages.
4. Proper classification of employees
Are they full-time, part-time or casuals? Each classification entails a different pay structure as well as obligations. Classify your employees carefully and clearly.
Are you looking to build an effective payroll system? Get in touch today.