Handling employee payments can be easy and straightforward when you manage the details.
No matter what kind of company you run, you are setting yourself up for mistakes when you fail to handle your payroll properly. There are some common mistakes that a lot of companies make when it comes to paying employees.
Consider these points to know how to avoid these costly and irritating mistakes.
1. Beginning the Payroll Process With Errors
There are several payroll mistakes that people fall into, but a lot of these mistakes happen at step one.
Employment or contracting work begins when you collect a person’s tax info upfront. If you make errors on the W-2s that you collect, or if you classify a person’s work status incorrectly, it will create discrepancies in the amount of taxes that you withhold, and allow for other compounding errors.
Be as careful as possible when putting together employee paperwork, and get the help of some human resources professionals that can provide another set of eyes.
2. Getting Overtime Wrong
Tracking people’s time and paying them correctly will be half the battle. Make sure that you have a universal method of tracking time so that your employees get paid in full for their overtime.
Stay up to date with overtime pay laws so that you are doling it out properly and at the correct rate.
3. Not Being Organized With Your Documentation
Simply getting sloppy with recordkeeping is a mistake that several businesses make. You can’t pay people properly unless you are thorough and consistent about documenting everything.
Having access to quality accounting software is one of the best ways to be consistent with your documentation and organization. This improves your ability to address all of your business with accuracy while collecting records that will be valuable.
4. Paying too Much or too Little
The more organized you conduct your business, the more likely you are to pay people exactly what they are owed.
Paying people either too much or too little can wreak havoc on your finances. It leads to miscalculations in your taxes and causes you to have to spend more money to correct mistakes later.
5. Missing Your Deadlines
Be sure that you always honor payroll time periods, payment dates, the issuance of tax forms and paying any money that you owe. If you get in the habit of missing deadlines, your company will keep facing uphill battles.
You’ll also lose the trust of your employees, which creates a weaker workforce as a whole. Be as transparent as possible when issues arise, but avoid issues altogether by religiously sticking to deadlines.
Handle Your Employee Payments Correctly
Making errors with employee payments is incredibly common, but can also be incredibly costly. You will avoid these issues when you follow the tips above.
At the Accfin Group, we can help you make sure all your employees get paid on time. We can offer you a free consultation to show you the kind of work we provide.
Take the time to contact us when you need help with your company’s bookkeeping and accounting work.