5 Signs You May Need a Better Payroll Solution
Posted on March 26, 2013
At first glance, it may seem like payroll processing isn’t all that complicated. However, as anyone in payroll can tell you, it can get complex, and fast.
Calculating an employee’s net pay, the amount he can actually cash out at the bank, involves taking his gross pay, minus FICA deductions, federal, state and local income taxes, and state unemployment premiums, as well as any court-mandated childcare payments. Voluntary payroll deductions may include retirement savings, health insurance premiums, life insurance premiums and "flex plan" contributions. Some of these deductions vary according to the size of the employee’s family, and others are deducted before withholding taxes are applied versus afterward. Many laws change annually and redistricting plans affect local tax liabilities.
And that’s just the basics. Do you still think payroll is an uncomplicated task?
If you want to make sure your company’s payroll runs smoothly and efficiently, consider these five signs that you may need a payroll software solution.
1. There are only one or two individuals capable of completing regular
Even for small companies, employees should be cross-trained to assist in payroll duties during those inevitable periods in which payroll employees are on vacation, ill or dealing with a personal crisis. For this to be possible, your system needs to be intuitively designed to learn and use. A good system shouldn’t require hours of training to learn how to use it.
2. Your payroll is calculated using an Excel spreadsheet
Excel is a useful and effective database program. There’s no doubt it works. But understanding it can be brutal for the novice. Excel’s functions are grouped into 12 categories, including Database, Financial, Math & Trigonometry, Statistical and Date & Time. Learning Excel to that extent can be intimidating to a beginner. For the expert, it can be time-consuming, especially since the program typically undergoes numerous application changes annually.
3. Changes to employee information can only be accomplished by a
particular department and only during normal business hours
When your normal procedure for updating employee data requires tracking down one or two people or filling out a paper form to be deciphered by someone else later, mistakes are bound to happen. This should be a transparent process so that your employees can ensure the data is correct as it is entered.
4. You receive regular employee complaints about paycheck mistakes
Employees are naturally very sensitive to mistakes in their paychecks. Regular mistakes can lead to a loss of employee morale and adoption of the opinion that they—and their pay—are not a priority for the business. The success of your business depends upon the dedication of workers who believe that their work is valued and appreciated by their employer.
5. You've been fined for missing deadlines or for inaccurate
The payroll taxes deducted from employee paychecks have different requirements as to the required forms to accompany the money and how they must be deposited. Failure to comply with any of these regulations can result in late filing fees and penalties on your business. This is a serious situation that could cost your business time, money and legal fees. It's one of the red flags that means this is more than a small problem for your business.
Time for action?
If any of these situations sound familiar, there are solutions to consider. Outsourcing the task to a payroll service like Paycor is a popular option. If you’re ready to explore ways Paycor can help you streamline your processes, gain efficiencies and relieve your staff of burdensome tasks, contact us today.