Many businesses set themselves up to fail – and they don’t even know it. Financial errors and payroll mistakes can cost a business more than just a penalty fee; companies have been shut down for failing to properly address federal and state laws regarding payroll. The IRS does not mess around when it comes to payroll taxes – and neither should you. Get your books in order with the following payroll tips to build a successful company on a solid financial platform:
Make Pay Policies Public
Release all details related to payroll including how the payroll system is structured, how raises are determined, and when payday occurs. Provide government-mandated resources like the United States Department of Labor’s minimum wage laws and overtime regulations. If possible, give hourly employees the opportunity to review their time and make corrections as needed before payroll is processed. An online attendance system is a great way to give employees access to their own information without creating extra work for your H.R. department.
Brush Up on State Law
In some situations, such as minimum wage, federal law prevails. In many other scenarios, however, state law is going to dictate a great deal of what happens to your company’s finances. Whether it’s payroll tax, meeting financial deadlines, or updating your State Unemployment Insurance (SUI) rate, state law plays a large role in determining the success of your business and the happiness of your employees. Your business would be well-served to hire an expert on state hiring laws or simply outsource payroll to an experienced payroll processor.
The best way to catch payroll errors and financial oversights in your company is to review your own books every year (or quarter). It’s much better to find a mistake in-house rather than letting the IRS find it for you. This also ensures your finances will be better organized and more easily accessed in the event of a real audit.
Do It Right the First Time
To avoid payroll mistakes, set yourself up for success from the very beginning. Keep detailed records, use the most up-to-date software, and classify employees correctly to avoid legal complications. If the burden of payroll management is too much for your staff to handle, consider outsourced payroll and business services that are not only capable of managing the work, but that thrive on it!
With the right team on your side, payroll taxes and processing can become a streamlined process. Your company’s finances should be a well-oiled machine that is maintained regularly and has a rigid schedule. There is little to no flexibility with federal and state payroll regulations so it is important to set your business up for success right from the start – and, if necessary, hire the experts to take over.
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