Running a business is no cakewalk. You have to juggle a million things at once. But one area that can make or break you is payroll. Mess it up, and your business could be in deep trouble before you know it.

This guide will walk you through the most common payroll pitfalls and how to avoid them. I’m not going to bore you with a stuffy textbook style. I’ll keep it real so you can protect your business. Let’s dive in.

Finding The Best Payroll Service

Trying to handle payroll yourself can turn into a nightmare quick. The regulations are complicated as hell. Taxes, overtime rules, time tracking…it’s a major pain.

That’s why most small businesses use a payroll service. When you find the right partner, it makes payroll easy breezy. You just provide the hours and money to pay people. They handle the rest.

But not all payroll companies are created equal. Here’s what to look for in your ideal match:

• Automatic tax filings – Don’t play games with the IRS and government. You need someone who knows all the obscure regulations and stays on top of changes.
• Direct deposit – Employees expect their money to appear like magic in their bank account, not old school paper checks. Make it happen.
• Mobile access – Pick a service where you and employees can tap into payroll info from phones and tablets. The fewer office hoops, the better.
• 24/7 support – Payroll issues don’t punch a time clock. Make sure the provider has someone to call nights, weekends, and holidays when you really need them.
• Labor law compliance – You don’t need lawsuits because payroll screwed up overtime or sick leave. Find someone hyper-focused on doing it by the book.
• Easy time tracking integration – Hours worked have to flow automatically into payroll to avoid headaches. Make sure they play nice with your timekeeping software.

With the right partner handling the grunt work, you can focus on all the other fires that need putting out when running your empire.

Record Keeping for Records for Audits, Payroll Documentation and Future Issues

Making payroll is usually the biggest regular expense your company faces. If cash flow falls out of whack, you can’t make those deposits on payday. That’s when things spiral downhill fast.

Know the warning signs that payroll is wrecking your cash flow:

• Never having quite enough in the bank before payday hits
• Paying people or taxes late (massive fines if you do this!)
• Employees grumbling about delays getting their money
• Relying on credit lines or loans just to cover payroll

Don’t stick your head in the sand. Be proactive so this doesn’t happen:

• Keep a payroll cushion in your bank account for emergencies
• Check on upcoming taxes so you’re never surprised
• Put new hires and raises on hold until finances stabilize
• Review hours and overtime closely each pay period to control costs
• Ask employees to submit time off requests early
• Use a payroll service to help manage the cash flow ups and downs

Keep payroll from punching holes in your budget, or it could knock out your business for good.

Classifying Employees

How you classify employees as hourly, salary, or contractors has huuuuge impacts on payroll. If you get it wrong, you can get socked with massive fines or lawsuits.

Two things determine who is who on your team:

Job Duties

Salaried managers: Responsible for big picture stuff

Hourly employees: Handle daily tasks

Contractors: Bring specialized skills for projects

Relationship

Employees: Integral to operations, consistent duties

Contractors: Work independently, temporary projects

It gets muddy quick. Consult the labor department’s rules if unsure. Or talk to an attorney to review your employee categories.

Better to take the time upfront than blow it and end up in legal trouble down the road.

What You Need to Keep On File

Imagine the IRS shows up wanting to audit your payroll records. Or an employee sues for unpaid overtime. Yikes!

You MUST have detailed documentation to avoid giant fines or settlements. Here’s what to keep on file for at least 4 years:

• Employee personal info, job titles, pay rates
• Timesheets and schedules
• Payroll records and registers
• Pay stubs and W-2s
• Recaps of taxes, benefits, deductions
• Time off accruals and usage
• Employment contracts

Set reminders to double check your records annually. Having your paperwork tight can save your butt!

If records are missing when you get audited or sued, you’ll likely pay the price big time.

Labor Laws and Regulations

Can you recite every employment law and regulation that affects payroll off the top of your head? Didn’t think so! Very few people can.

That’s why you’ve gotta put some systems in place to stay up-to-date:

• Bookmark key government sites and signup for email updates on changes
• Attend seminars or webinars on labor laws
• Review your policies, contracts, and handbooks yearly
• Confirm your payroll company handles any new requirements
• Talk to attorneys if you have compliance questions

Rules are always evolving on:

• Minimum wage
• Overtime
• Taxes
• Paid leave
• Reporting

Don’t stick your head in the sand. Keep payroll compliant, or you will eventually get bitten.

Cloud Payroll

The old paper timesheets and file cabinet payroll methods lead to mistakes. You need an online payroll system to stay out of trouble.

Look for one with these key features:

• Mobile app – Employees can check their hours and payroll status from their phone anytime. No more chasing down managers with questions!
• Reminders – Keeps managers in the loop on approvals, birthdays, reviews, and deadlines. No more fire drills!
• Secure access – Top notch data security to keep personal info safe from hackers.
• Rules engine – Sets up triggers and actions when certain conditions are met to catch errors. Super slick!
• Reporting – Real-time reports help you analyze costs, overtime, turnover, and other trends.
• Document storage – Safely access old records, contracts, handbooks, W-2s in one place.
• Tax compliance – Automatic filings, deposits, and reminders to avoid penalties.

Do your homework to pick the right platform. Get demos, talk to their clients, read reviews online. Moving to a slick cloud payroll system can save your tail.

Payroll Input Errors

Payroll seems easy – just enter some hours and hit a button to pay people, right? Wrong! Small mistakes entering data can cause huge problems:

• Hours entered incorrectly
• Dates mixed up on timecards
• Incorrect pay rates or deductions
• Forgetting to update info for promotions or life events
• Lag time from when hours worked until entered into payroll

These get bigger over time. Then you’re dealing with incorrect pay, extra taxes owed, missed deductions, and some very unhappy employees. No bueno.

Here are some controls to catch errors before they blow up:

• Do payroll audits before AND after each pay period – verify everything!
• Limit system access to key personnel only
• Require manager approval for all timesheets and pay changes
• Insist on electronic timecards to eliminate illegible handwriting

Your team depends on accurate paychecks to pay their own bills. Don’t betray that trust with sloppy data practices!

Payroll Processing Deadlines

Payroll is a race against the clock every period. Even small delays can spiral into big problems:

• Paychecks get delayed
• Direct deposits don’t arrive on time
• Tax agencies get cranky if you pay late
• Employees panic about rent due if pay is late

Common timing snafus:

• Managers drag feet approving hours
• New hires don’t submit paperwork in time
• Bad weather delays check delivery
• Payroll staff out sick on payday

Map out all key dates well in advance on a payroll calendar:

• Tax deadlines
• Direct deposit schedules
• Manager approvals
• Check printing and delivery

Build in padding on your schedule for slip ups. Follow the old adage: “On time is late, early is on time.” Don’t press your luck when employees’ livelihoods are on the line.

Fraud Risk

Like any area handling money, payroll can attract fraud. Employees may fudge hours or add fake workers. Managers could be in on the scheme. Even your payroll provider might pocket some of the cash.

Watch for these sneaky signs of fraud:

• Hours never vary – always 40.00 exactly each week
• Former employees still getting paid
• Expenses lack receipts or seem excessive
• Employees with access making their own unauthorized pay changes
• Pay rates way above normal for that role
• Direct deposit info changing unexpectedly

Set up safeguards like:

• Using time clocks with fingerprint or badge swipes to record hours
• Having multiple people review and approve pay changes
• Running payroll reports to catch red flags
• Changing system passwords regularly and limiting access
• Doing surprise audits and double checking totals
• Encouraging anonymous tips if anyone suspects fraud

Payroll schemes happen more than you’d think. Don’t let your company be the next victim!

New Payroll System? Don’t Wing Implementation!

Maybe your payroll provider raised prices. Perhaps you’re seeking more automation. Either way, implementing a new payroll system takes planning:

• Define goals and metrics for success upfront
• Map out current payroll workflows in detail
• Scrub employee data thoroughly before import
• Train admins and run tests before launch
• Start with one team as a pilot before going companywide
• Have vendor consultants assist with setup and migration
• Document every step and guideline for your team
• Tweak processes during the transition period
• Announce changes and timeline to employees early

You can’t just flip a switch and expect everything to work. Sloppy rollouts lead to missed paychecks, tax penalties, and fury from your team.

Take your time and get it right – your business depends on it!

Streamline Payroll Processing

Don’t settle for just getting payroll done. Look for ways to make it better:

• Use time clocks and mobile apps – say bye to paper timesheets!
• Standardize procedures into checklists and document them
• Store records digitally on a shared drive – stop the filing cabinet madness!
• Have backups trained on all key processes
• Schedule annual reviews of payroll practices and policies
• Get employee feedback on what works and what doesn’t

Even small process tweaks add up. Don’t leave savings on the table. Kaizen that payroll!

Final Thoughts

Let’s recap the highlights so you can avoid payroll disasters:

• Find an affordable and reliable payroll service provider to handle the grunt work
• Manage cash flow closely to fully fund payroll without delays
• Classify employees and contractors properly to avoid legal issues
• Maintain immaculate documentation and records
• Keep up with changing regulations and compliance rules
• Use modern online payroll software with key features like mobile access
• Institute controls and audits to prevent or catch payroll input errors fast
• Give yourself a cushion on deadlines – better early than late!
• Guard against fraud through separation of duties and verification
• Take time to thoroughly test and train before launching new systems
• Continuously look for ways to streamline and improve processes

Payroll probably won’t ever be your favorite part of running a business. But get it right, and it will allow you to succeed. Keep employees happy with accurate, on-time pay, and avoid turning into the next payroll disaster headline!

Payroll errors can cause major financial and emotional distress for employees. Recent news stories have highlighted systemic payroll issues occurring at large companies, where employee pay checks have gone missing or they have been significantly underpaid over long periods of time.

These types of errors can be devastating for employees living pay check to pay check, which accounts for over half of U.S. households. Payroll mistakes erode employee trust and satisfaction, while exposing organizations to compliance risks.

Common Payroll System Issues

Some of the most common payroll issues that lead to incorrect or missing employee pay include:

Inaccurate Time Tracking

If the payroll system fails to accurately capture and calculate all hours worked, including overtime, employees will invariably be underpaid. Manual processes for tracking hours across multiple locations, projects, and time zones compound these issues.

Payment Verification Failures

Even with proper time tracking, there could still be system failures when it comes to verifying that final payment amounts match hours worked before disbursement. Flaws in these automated verification checks lead to lost or inaccurate payments.

Tax Code Errors

Applying incorrect tax codes and calculations leads to employees getting overpaid or underpaid. These payroll tax mistakes cause major issues at tax time when employees either owe money back or realize they have left deductions on the table.

System Access Control Failures

Lacking proper access controls and permissions allows changes to be made by unauthorized staff. This can lead to inadvertent or deliberate manipulation of pay rates, hours, or critical employee data that corrupts the accuracy of payments.

Integration and Update Failures

Many payroll systems consist of layered, disjointed applications that do not properly integrate or get updated in sync. A change in one system, like HR software, may not cascade to payroll, leading to inaccurate comp.

Error Logging and Monitoring Shortfalls

Payroll systems that lack proper error logging make it much harder to identify and resolve issues early. Shortfalls in monitoring and acting on logged errors means problems repeat and compound over multiple pay cycles.

The Employee Impact of Payroll Errors

Payroll problems have a major impact on employees in various ways:

Financial Emergency and Stress

When paychecks bounce from bank accounts because of payroll failures, it triggers emergency scenarios for those without savings. Over 50% of U.S. households have less than $500 in emergency savings. The stress this causes is significant.

Knock-On Effects

As a result of being underpaid due to payroll mistakes, workers are often left struggling to afford basic necessities while waiting for the problems to be fixed. For many low-income workers living pay check to pay check, these negative consequences can be catastrophic.

Unexpected Tax Burden

Wrong calculations over months or years result in owing huge amounts of back taxes and penalties to Internal Revenue Service (IRS). This includes lost deductions and income they probably have already spent.

Steps for Building Effective Payroll Systems

Organizations can take several key steps to implement payroll systems capable of minimizing impactful errors. Those steps are as follows:

1. Implement Robust Time Tracking: Leverage time clock systems, geo-tracking, and project management software to accurately capture hours worked across multiple locations and projects. Automate overtime calculations.
2. Build Payment Verification: Incorporate layered verification checks that match payments to hours worked and flag exceptions for review. Use secondary authorization prior to releasing pay.
3. Maintain Updated Taxation Rules: Keep tax codes and calculations updated in the system per latest regulations. Create integration and alerts for tax law and policy changes.
4. Enforce Access Controls: Control payroll system permissions to limit changes or access to sensitive employee pay data only to essential staff. Conduct periodic user access reviews.
5. Facilitate System Integrations: Implement reliable integration channels across HCM, time tracking, expenses, and payroll systems, keeping config and data flows in sync.
6. Monitor Errors and Changes: Log all system errors, data changes, and corrections, then review logs regularly to identify issues early. Set severity-based alerts on log event types.

Conclusion

Providing dependable and precise salary is one of the pillars of the deal of interest that people nowadays expect from their job. Companies that neglect this elementary obligation will be plagued by a lot of compliance breaches, loss of skilled employees and a bad reputation.

Ensuring timely and correct payroll processing, payment verifications, system integration, access control and payroll monitoring, the finance leaders can, in this way, pre-emptively handle payroll errors, before they affect employees. This in turn generates transferable skills that should make them >competitive candidates when they look for other jobs.

As your company grows, you will have to deal with new challenges. Have you ever wondered why, with a payroll system in place, even major organizations still face difficulties? Consider multinational corporations that operate in several jurisdictions, each with own labour laws and tax laws. The intricacies involved might be quite daunting! Furthermore, not just big businesses face these issues.

Small firms often struggle to maintain compliance requirements because they lack the tools and knowledge necessary to overcome obstacles. We’ll dissect these problems and provide workable answers in this blog to help companies just like yours deal with the challenges of payroll administration. These are the main payroll issues that your company has to overcome.

Statutory challenges and legal compliance

Being a business owner is not easy. Keeping up with the legislation is one of the major challenges in payroll. There are several state laws, labour laws, and other restrictions to abide with.

These regulations might be complex at times, and they are always changing. Therefore, it is possible to make errors and incur heavy penalties even with your best efforts. Payroll is now handled manually by many organizations or is delegated to their HR department. Nevertheless, the rules will change, and you’ll be back at the beginning even if you spend hours memorizing them. That might interfere with your payroll process, much like an endless game of catch-up.

Solution: One potential solution to address payroll compliance issues is to consider purchasing automated payroll software that receives frequent updates. Continuous education can help you stay informed about how rules are changing. If you want an additional degree of certainty and accuracy, think about outsourcing your payroll to seasoned professionals.

Tax issues

Managing taxes inside payroll might resemble navigating a dynamic set of regulations. It may be difficult to calculate and deduct the appropriate amount of taxes from workers’ paychecks and to make sure the company pays its fair part of payroll taxes on schedule. Tax compliance mistakes may result in penalties, fines, and legal problems, which makes payroll administration very difficult.

Solution: Invest in automated software, keep up with tax changes, keep proper records, and think about outsourcing to professionals to overcome tax issues with payroll. Make tax compliance easier for a payroll process that is stress-free.

Data handling and reporting

Managing a lot of crucial pieces of information is similar to juggling data handling, which presents a hurdle in payroll. Imagine precisely handling a ton of employee data, including personal information and pay rates. A single slip might result in errors, which can annoy coworkers and perhaps result in legal issues.

Moreover, there is an imperative duty to protect this information. If it falls into the wrong hands, it may cause breaches and harm the image of your business.

Solution: Make sure that only authorized staff can access data by selecting a secure payroll system with user access limits. Encrypt confidential data as necessary. Steer clear of actual document storage. To uphold best practices for data security and privacy, provide employees managing payroll data with continuing training.

The Requirement for Versatility

Varying work hours, working remotely, and changing company requirements need prompt modifications. Manually doing this might result in mistakes and hold ups, which will impact workers and the company. The secret to overcoming this difficulty is to be quick and technologically aware.

Solution: Regardless of where your staff is located, provide them with self-service choices and ensure that your payroll procedure remains compliant. Technology and compliance expertise work together to maintain flexibility.

Accuracy of Payroll  

Errors occur, and in the payroll process, they may aggravate workers and result in penalties.  Payroll solutions increase accuracy, save time, and reduce mistakes by automating data input. It’s even better when staff members have the ability to update and evaluate their data. You can efficiently analyze your company and make confident forecasts with accurate data.

Solution: Provide your staff with a well-organized time-tracking system and learn how to compute overtime compensation in accordance with your region’s payroll regulations. Pay attention to tax rates since they might be confusing. Additionally, think about using payroll software, which takes care of all the computations and record-keeping.

Technology Integration

Although it might be complicated, integrating technology into payroll procedures can provide efficiency and insights. Facilitating smooth communication between disparate payroll systems across geographical locations is akin to managing multilingual musicians. Although keeping systems current in the face of rapid technology advancements is a constant problem, the benefits in accuracy and efficiency make it worthwhile.

Solution: Start by implementing unified payroll software, which can interface with various systems with ease. Select cloud-based solutions for their scalability and flexibility, which will allow you to easily react to changes in technology and guarantee updates and compliance in all areas.

Data security issues

The payroll sector is not an exception to the rising concern about data security in our tech-driven society. The increasing risk of cyberattacks and data breaches makes payroll data security more difficult to achieve in 2023. It’s important to remember, however, that security solutions are also developing to mitigate these dangers and may even be advantageous.

Solution: Strict access restrictions, frequent updates, staff education, encryption, and comprehensive backup and recovery procedures are all necessary to address data security issues in payroll. Another option is to outsource payroll to a reputable company with robust security protocols. Together, these precautions protect payroll data from intrusions and attacks, guaranteeing data security throughout the payroll processing process.

Cost management

Payroll expenses may be somewhat annoying. Indirect costs come from human labour and mistake correction, whereas direct costs come from paying your staff and software fees. Payroll problems may cause turnover, while compliance errors result in penalties. Controlling these expenses is essential.

Solution: Payroll cost issues may be resolved by automation, outsourcing, compliance monitoring, audits, and training. Adopt cost-effective procedures, take scalable technology into account, and keep an extensive budget. Self-service alternatives for employees may also aid in efficient cost management.

Final words

The payroll sector is always humming with new developments and adjustments. Payroll issues abound for organizations in this ever-changing landscape. We have no time to relax when it comes to managing shifting tax laws and making sure employee payments go through without a hitch. Payroll management by hand is a difficult undertaking. Numerous obstacles may cause you to stumble, which will impair your accuracy and adherence. And those fines for non-compliance, believe me? They’re completely boring.

Are you wondering whether there’s an easier method of handling everything? A cutting-edge payroll software programme that meets your requirements is what you need. Do you long for your paycheck to be exactly accurate? What about the ability to easily adjust to requirements that are always changing? And isn’t your company’s primary goal guaranteeing employee satisfaction? Imagine having one complete payroll software solution that includes all of these important functions in a tidy package.

Payroll management is an essential aspect of running a business. Unfortunately, it is also an area that can be fraught with challenges and issues. As businesses head into 2023, there are several payroll problems that they need to be aware of. In this article, we will discuss the top ten payroll problems businesses face in 2023 and how to overcome them.

Compliance: Staying compliant with ever-changing labor laws and tax codes is a challenge for many businesses. Failure to comply can result in hefty fines and penalties.

Solution: Keep up with the latest updates in labor laws and tax codes and ensure your payroll system is set up to comply with them.

Employee Misclassification: Misclassifying employees as independent contractors can result in serious financial penalties and legal trouble.

Solution: Review your employee classification policies and ensure you are accurately classifying employees as either full-time employees or independent contractors.

Payroll Errors: Errors in payroll processing can lead to incorrect paychecks, tax penalties, and employee dissatisfaction.

Solution: Implement a reliable payroll system with proper checks and balances in place to catch errors before they occur.

Time-Consuming Paperwork: Payroll paperwork can be time-consuming and cumbersome, taking valuable time away from other important business tasks.

Solution: Implement an automated payroll system that streamlines the payroll process and reduces the need for manual paperwork.

Payroll Tax Calculation Errors: Incorrect payroll tax calculations can result in tax penalties and a loss of employee trust.

Solution: Utilize payroll software that automatically calculates payroll taxes and ensures compliance with local, state, and federal tax laws.

Employee Benefit Management: Managing employee benefits such as health insurance and retirement plans can be challenging for businesses.

Solution: Utilize payroll software that can manage employee benefits, track enrollment, and ensure compliance with government regulations.

Garnishments and Levies: Garnishments and levies can be time-consuming and require detailed record-keeping.

Solution: Implement a payroll system that can handle garnishments and levies and maintain detailed records.

Onboarding: Onboarding new employees can be a time-consuming process, including collecting tax and banking information, and setting up employee accounts.

Solution: Use an automated onboarding system that streamlines the process and ensures that all necessary information is collected and stored.

Keeping Up with Changing Payroll Laws: Payroll laws can change frequently, requiring businesses to stay up to date with the latest information.

Solution: Join professional organizations or work with payroll providers that can keep you up to date on changes in payroll laws.

Security: With sensitive employee information stored in payroll systems, ensuring the security of the data is crucial.

Solution: Utilize a secure payroll system that has built-in security features and ensure that access to payroll data is limited to authorized personnel.

In conclusion, businesses in 2023 will continue to face payroll problems that can be challenging and time-consuming. By implementing automated payroll systems, utilizing professional services, and staying up to date on the latest changes in payroll laws, businesses can overcome these challenges and keep their payroll systems running smoothly.

Many businesses fail every year, and there are several reasons for their failure. One of the main causes of business failure is payroll issues. Payroll management software and integrated payroll services can help reduce this risk, however.

In fact, small businesses have a 25% chance of failing in their first year. Managing your payroll well can help you avoid cash flow problems and give you a better chance of succeeding in the long run. Implementing these solutions can help you avoid common mistakes that lead to business failure.

Payroll Services

There are many different payroll service providers, each with their own unique offerings. Payroll processing can be a great solution for small businesses because it is easy to use and eliminates the hassle of doing payroll on time.

Many companies make costly mistakes when it comes to payroll taxes, which can lead to their downfall. However, with the right knowledge and experience, this doesn’t have to be a worry for employees. In fact, if payroll is a problem for workers, it often results in panic and decreased productivity. Oftentimes employees start looking for new work opportunities.

If you use a professional payroll service provider, your company’s payroll periods will never get missed. The only requirements are that staff hours worked are accounted for and the necessary funds are in the bank to fund pay checks.

Using a 3rd party payroll service is the best way to make sure your payroll runs smoothly and efficiently. However, you must provide correct employee information from the beginning for this to happen. The best way to achieve this is by using a combination of outsource payroll services and workforce management software. Workforce management software can be used to record and track your company staff’s attendance and hours. It is important that both your payroll services provider and your workforce management software are compatible to avoid any issues.

There are a few key components to look for when choosing a workforce management system: attendance, time tracking, scheduling, and document management. It’s also important that the system can be used from mobile devices and that employees have access to it through self-service. These two platforms working together can help you run your business more effectively. However, there are a few payroll issues that you need to avoid at all costs, or they could doom your business:

Cashflow

Without cashflow, a business can quickly fail. This is due to things like payroll not being paid on time or taxes being owed. A way to manage these issues and improve cashflow is by using payroll services and workforce management software. These tools help businesses to better understand and keep track of their finances, which can avoid any disastrous consequences.

In short, cashflow is important for businesses, and managing it through payroll services and workforce management software is a smart way to keep everything in check. This can help avoid any major problems down the line and keep your business running smoothly.

It is essential for businesses to maintain good cashflow to succeed. This means that payroll must be paid on time, and taxes as well. Businesses can run into trouble if they don’t manage their payroll correctly. Software and tools like Payroll Services and Workforce Management Software help businesses do this more effectively than trying to do it manually.

Employee Classifications Errors

Employee classification errors are a common payroll mistake that can easily be prevented. However, these mistakes often lead to business failure. There are three types of employee classifications:

• exempt salaried employees
• non-exempt hourly employees and
• independent contractors.

Making mistakes when classifying employees can lead to big fines or penalties. The main factors that impact proper classifications are job duties and relationship status. Workers getting a salary doesn’t negate having to pay them overtime – in fact, trying to avoid paying overtime can lead to big trouble. Companies are smart to hire a professional payroll service and do employee classifications correctly from the get-go.

Paying Employees Incorrectly

Paying your employees incorrectly is one of the worst payroll mistakes a business can make. This can easily lead to decreased morale, as well as legal penalties. To avoid this, you need to be absolutely sure of how much each employee should be paid – and this includes things like overtime, shift differentials and bonuses. The best way to do this is by using a payroll services provider that can handle all these things for you.

Record Keeping for Records for Audits, Payroll Documentation and Future Issues

A bad audit and an ensuing lawsuit can destroy a business. This is particularly the case if you’re not ready. Setting up a system that collects and maintains your company’s payroll records can protect your business from regulatory fines and penalties, employee allegations, and real-life audits.

Workforce management software provides many benefits for businesses, including reducing the risk of bad audits. The software is a built-in automated component, and it works 24/7 365 days a year. You can use it to manage your business, respond to employee allegations, and review your payroll records.

Employees can self-manage due to login capability to review their own hours and records. This relieves managers and improves workplace efficiency. Additional historical work records are stored and backed up in the cloud, giving companies the information they need to improve their business.

If you’re worried about bad audits, consider implementing a workforce management software system. It could protect your business from many potential problems.

New and Existing Employment & Health Care Laws and Staying in Compliance

Being an employer is not easy – it’s complex and challenging. This has been the case for many years, and it’s not going to change anytime soon. New business owners need to be aware of all labor and insurance laws, as there are regulations governing a wide range of business activities. Payroll is one area where compliance can be particularly tricky.

There are a few resources available to help business owners stay compliant with labor laws. The U.S. Department of Labor’s website is a good place to start. Employers can also consult with an experienced attorney or accountant to ensure they are taking all the necessary steps to comply with the law.

Payroll addresses the following important sections

·       Fair Labor Standards Act (FLSA)

·       Affordable Care Act (ACA)

·       Payroll Based Journal (PBJ)

·       Family Medical Leave and Fair Scheduling Laws

·       Union Agreements

·       Industry-specific Regulations

Regulation Covering Non-U.S. citizens Employees

There are fines for businesses of all sizes from regulatory agencies. It may be hard to believe, but even large companies and small businesses can be required to pay fines that lead to their demise. This is because many companies fall under various state laws, depending on the state they’re located in or do business in. For this reason, it’s a smart idea to use the services of a payroll service provider.

Cloud Record Maintenance with Workforce Management Software Services

Workforce management software can help companies keep track of payroll and employee compliance records. These records are important, as they can help a company avoid fines. Workforce management software also comes with built-in analytical tools and reports that make managing people and pay easier.

Payroll Input Mistakes

People make mistakes when inputting numbers. Here are some examples of common mistakes:

• Wrong hours are written down by staff on old school timesheets
• Misplace timecards
• Clocking out on the company time clock gets forgotten
• Employees forget to clock out or clock in from their mobile device.

One Error Translates into Several Errors, Expenses and Time Lost Going Forward

One input error can cause a domino effect of mistakes that can impact payroll taxes and social security withholdings. This, in turn, results in employees receiving short pay checks. Depending on the complexity of someone’s wages and payroll/commission structure, fixing these errors can be difficult.

However, big mistakes – even purposeful ones – can result in hefty fines for the company. Therefore, it is important to be diligent in ensuring accurate input and to catch any errors that may occur.

Input errors can happen for a variety of reasons – sometimes human error, sometimes fraud. For example, staff might add hours they didn’t actually work, or managers might reduce hours to meet company goals.

Catching and correcting these errors can be difficult, but it’s important to do so to avoid any potential penalties.

Time Element of Payroll Mistakes

When there are payroll errors, it can have a domino effect on the company. Payroll must fix every component of the error and meet with all concerned employees and their manager to determine what happened, how to fix it, etc.

This process can take a lot of time and be very costly for the company. However, by using payroll services and workforce management software, companies can put a system in place to reduce the chances of these errors happening in the future. This will save the company time, money, and potential fines for non-compliance.

Manage Payroll Well and Improve Your Chances of Running a Successful Company

When cash is tight, it’s important to be very careful with your payroll expenditures. Make sure you’re not spending money unnecessarily and that you’re making the most of every penny. Integrated workforce management software and payroll services can help make this process more efficient for your company and its employees. This will ensure that everyone gets paid on time and that your company stays in compliance with all relevant regulations.

Businesses fail all the time and there are several issues that cause those failures. It’s a fact that payroll in the year 2022 may be the one that comes back to bite a business that it never even considered a risk area unless it acts now. However, one way to mitigate that risk is use workforce management software and integrated payroll service. Fact of the matter, businesses normally fail in year 1 to the tune of 25%. The top reason businesses fail is due to payroll issues. Managing payroll well can reduce cash flow problems and give businesses a better chance at succeeding for the long haul.

Payroll Services

Payroll services vary from company to company. There are several payroll service providers offering payroll processing that offer more than just straight forward payroll processing.  Several of the primary reasons payroll services are great for small businesses is because it’s easy, eliminates the hassle and it gets payroll done on time. Companies rarely have the experience and knowledge needed about payroll taxes, payment profiles and the expertise to do it right. Payroll tax mistakes can be costly, and they have caused the downfall of many companies. Payroll should never be a worry for employees. If it is a problem, employees panic, work slows down and many times employees start looking for work elsewhere.

Payroll periods never get missed when you use a professional payroll service provider. The only requirements to meet your company’s payroll period are staff hours worked and making sure necessary funds are in the bank to fund the paychecks being disbursed. Using a 3^rd party payroll service will help you run payroll properly, but you have to make sure you provide correct employee information from the beginning. The best way to make sure correct employee information is in place is to combine outsource payroll services with workforce management software.  Workforce management software is used to record and track company staff attendance and hours. Both your payroll services provider and your workforce management software need to be compatible.

Find a workforce management system that includes the important components of attendance, time, scheduling and document management. It is wise to find a system that can be done from mobile device and includes employee access that is self-service. Both of platforms working in tandem can help you run your business more effectively. Listed below are the payroll issues that must be avoided at all costs, or they may doom your business:

1. Cashflow

It is a fact that without cashflow your business can fail very quickly. Payroll doesn’t get paid, or it’s late. Company’s delay paying payroll taxes which puts the company in the crosshairs of the tax collectors like State Taxation and Revenue and the IRS. Overtime and overstaffing can break a business in half and destroy it. That is why payroll services and workforce management software is a critical tool most businesses should put in place. Managing payroll and staffing through these tools can help a business manage cashflow so much better than doing it manually.

Employee Classifications Errors

Employee classification errors are a regular payroll mistake. It’s so easy to prevent, but it’s a regular reason for business’ doom.

Business classifications are as follows:

1. Exempt salaried
2. Non-exempt, hourly
3. Independent contractor

Non-exempt get overtime, exempt do not earn overtime and contract employees are just that, on contract. If an employee is not classified properly non-compliance can turn into huge fines or penalties. Mistakes occur mostly regarding complicated classifications. The main factors that impact proper classifications are job duties and relationship status. Workers getting a salary doesn’t negate having to pay them overtime. Trying to avoid big pay expenses can lead to big trouble. Companies are smart to hire a professional payroll service and do employee classifications the right way.

Record Keeping for Records for Audits, Payroll Documentation and Future Issues

A bad audit and an ensuing lawsuit can destroy a business. This is particularly the case if you’re not ready. Setting up a system that collects and maintains your company’s payroll records can protect your business from regulatory fines and penalties, employee allegations and real-life audits. Workforce management software is a built-in automated component, and it is works 24/7 365 days a year. You can use it to manage your business, respond to employee allegations regarding payroll. Employees can self-manage due to login capability to review their own hours and records. This relieves managers and improves work place efficiency. Additional historical work records are stored and backed up in the cloud giving companies the information need to improve the company regarding a variety of work subjects.

New and Existing Employment & Health Care Laws and Staying in Compliance

Compliance is not a proverbial piece of cake, it’s complex to say the least. This has been the case for 50 years or more and it is not going to change. New business owners have to begin the process of being an employer with a mindset of starting and then staying in compliance with respect all labor and insurance laws. There are regulations for a large portion of business subjects and payroll is number one without a doubt.

Payroll addresses the following important sections

• Fair Labor Standards Act (FLSA)
• Affordable Care Act (ACA)
• Payroll Based Journal (PBJ)
• Family Medical Leave and Fair Scheduling Laws
• Union Agreements
• Industry-specific Regulations
• Regulation Covering Non-U.S. citizens Employees

Fines are applied to businesses from small businesses to large corporations by regulatory agencies. It’s hard to fathom, but big companies and small businesses may be required to pay fines that doom the company. Many companies are subject to a variety of laws due to the state it’s located in or location in a particular state. Due to these issues, it pays literally to hire and use a payroll service provider.

Cloud Record Maintenance with Workforce Management Software Services

Companies are able to develop and manage all their payroll and employee compliance records using a workforce management software service. Fines are real and nothing to sneeze at. Well-kept payroll and personnel records are worth their weight in gold because record keeping is maintained automatically. Additionally, workforce management software helps company manage people, pay and the company more effectively using its built analytical tools and reports.

Payroll Input Mistakes

People makes mistakes inputting numbers. Here are a set of input mistakes made all the time:

• Wrong hours are written down by staff on old school timesheets
• Misplace timecards
• Clocking out on the company time clock gets forgotten
• Employees forget to clock out or clock in from their mobile device
• Managers and company supervisor neglect tracking staff over time.
• Data entry errors by human resources and staff

One Error Translates Into Several Errors, Expenses and Time Lost Going Forward

One input error can cascade into multiple errors adding up over and over. Inputs done incorrectly directly  impact payroll taxes and withholding for social security taxes. A short paycheck is a very bad thing from an employees perspective. Fixing it on the next check or immediately can be complex, depending on the complexity of the person’s wages and payroll or commission structure. Errors can be human and sometimes the errors are due to fraud. Staff can add hours the didn’t work and managers reduce hours to meet company goals. Big mistakes our purposeful paycheck errors can end up in a company paying giant fines.

Time Element of Payroll Mistakes

There is a domino effect when there is payroll error or there are payroll errors. Payroll has to fix every component of the error and they have to meet with all concerned of affect employees and their manager to determined what actually happened, what the true case is and how to fix it. The time it takes to resolve the problem can be immense and it ends affected the company from a variety of aspects including hours spent fixing it, employee productivity and potential fines that have to be paid due to non-compliance. Big fines can doom a company.

Payroll services and workforce management software combine can solve the issue and put a system in place to reduce the chances of it happening in the future.

Manage Payroll Well and Improve Your Chances of Running a Successful Company

When cash is tight it means you really have to run payroll for your business like a Swiss watch. Observe your payroll numbers to make sure you’re not spending money on payroll needlessly and make sure you’re making the most of every penny.  Using integrated workforce management software and payroll services will give your company, its managers, and your employees the tools to run the company well, get paid on time and to stay in compliance.

Managing company payroll is overwhelming for many Human Resources staff. There are several real issues that do come up when completing company payroll. Keep in mind when the issues are identified they are normally simple to address. Here are the top payroll issues and how to address them. They are as follows:

Paid Time-Off and Sick Leave

It is mandatory and critical to account for all paid time-off and sick leave when completing payroll. When it comes to one mistake or several mistakes regarding vacation pay or sick leave, the cumulative negative effect can turn into a catastrophe for a company.  Payroll is an intricate endeavor and due to days off for sick leave or vacation the HR department may need to delay processing it. To eliminate this from happening, make it a requirement that all staff work hours be input into the company’s timekeeping record three days before payroll processing is to take place.

“Payroll is a complicated process, and it may be pushed off due to holidays or sick days,” said Masterson. “To avoid this, make sure you have the work hours of all of your employees at least three days in advance. If you notice a paycheck will be late, let the employee(s) know as soon as possible.”

Communication Errors

Errors are going to happen, and they are going to occur occasionally. But when it comes to Human Resources managing payroll, their errors are public and need to be deal with immediately. When payroll errors are made, the Human Resources department must communicate any payroll company policy updates or components that are not understood to make certain everyone is understands those changes completely, from the top to the bottom of the company.

Human Resources managers must be certain they keep an open clear line of communication about any aspects impacting company employees’ pay. When tax rules are changed by a state or the federal government, human resources managers to learn what the changes are and then update payroll to bring the company into compliance, plus communicate those changes to staff so they know about it before it impacts their paycheck.

Incorrectly Classified Company Staff

An error many companies incur is knowing not all people working for it are viewed as an employee by the federal government.

Companies that employ temporary staff, gig workers, freelancers, contractors, or vendors providing services need to know these workers are not employees of the company because they do not meet the rules to classify them as such. The difference from certain workers to other workers impacts paid benefits, employment and federal income taxes withheld and the issuance of a 1099 or a W-2, which is reported directly to the IRS. When a company does not classify an employee correctly it may trigger several negative outcomes including fines and penalties. It is paramount you have complete knowledge and comprehension of how each person working for your company needs to be classified when it comes to their worker employment status.   

Not Paying Payroll On-Time

Paying staff members on time is a duty than cannot be ever be delayed. In the business world there are problems that arise that are beyond your control such as large unpaid invoice which means your company is left unpaid which may impact whether you can pay your staff or not  

Your company absolutely must have a hard policy regarding a regularly scheduled payroll being disrupted where the problem is always communicated to the company staff immediately. Communicating the payroll disruption immediately will hopefully give them the time to adjust their finances in their personal life. Know for a fact that employees are never going to accepting about a late paycheck.  

Summing Up Top Payroll Problems

Payroll is the lifeblood of the success of all companies. Team members perform work that generates income from which the company hopefully makes a profit. Without hard working the company does not exist. Companies should look at using the best payroll and time keeping technology available today so that payroll is paid accurately, and records are kept that make sure the company follows federal and state employment wage and hour laws. Employers need to employ strategies and policies that make sure they follow all state laws with respect to freelance and contract employees. Employers need to make sure they keep accurate time-off and sick leave records and pay employees for them accurately. Communicating all important changes to employees when they occur when it comes to payroll is critical. All employees need to be classified when it comes to their employment classification correctly, from gig workers to full-time employees. Payroll must be paid on time without fail and if it cannot be paid on time, this fact must be communicated to employees immediately.

Managing company payroll is overwhelming for many Human Resources staff. There are several real issues that do come up when completing company payroll. Keep in mind when the issues are identified they are normally simple to address. Here are the top payroll issues and how to address them. They are as follows:

Outmoded Payroll Methods

Companies need to invest into a payroll service. The suite of services offered by online payroll companies includes timekeeping a component that records staff time from when they start work, go to lunch, return from lunch, and when they clock out when the workday ends. Employing a old timekeeping system or one that has errors from time to time can create a myriad of problems including tardy payroll or incorrect overtime. Wage and hour mistakes, such as short paychecks or unearned overtime, can create a series of problems that can snowball into bigger ones.  

Recent surveys report that close to 30% of companies in the U.S. are using payroll systems that are a decade old or more.  Payroll professionals are trapped in overwhelming situation that is difficult to deal when using an outdate payroll system. Essentially, they are required to count on a payroll system that gives them reduced insight into the effect payroll has on the total performance for their entire company.

Outdated payroll systems cannot be counted on, particularly when a company is up against a time constraint. When a system crashes and employees may not be paid on time, the Human Resources department may be forced to cut manual checks instead. This type of problem is a huge waste of time and resources.  

Another issue that comes up is when staff work overtime inadvertently. When staff is reporting time haphazardly or it is being calculate incorrectly, company overtime has been known to be the reason companies have serious wage and hour problems. Companies should install an accurate time-tracking system that reports overtime directly to the Human Resources department. Companies big and small need to take a look at spending the money for an online payroll provider which will safeguard correct time keeping records and the correct calculation of overtime pay and rates.   

2021 Freelance, Gig Workers and Remote Employees

Each state and country have its own set of policies and laws on the books when it comes to employee classification. Be certain to complete the homework needed to completely comprehend the different set of regulations for each so you can adjust how you pay and classify employees according to their location.

Many employers, including your company, may not be knowledgeable of the myriad of different states employment and wage laws and tax regulations. Prior to bringing a new staff member onboard that will work out of state, take action to make certain your payroll team member on, learn the laws of that state so the company can take the necessary action to follow with respect to wages, laws, and taxes regarding the new employee. For instance, your current payroll system may not permit your company to issue payroll check to an employee in a different state.  

Due to the advent of companies moving toward remote workers and navigating away from in-office workers, making that transition may necessitate hiring a consultant to help smooth out this major change. It is not practical for the head of a human resources department and its staff to gain the needed to knowledge to comprehend and comply with the wage and employee laws of several different states or countries. It makes sent to hire a consultant or sign-up with a payroll company to handle this change the right way.   

Summing Up Top Payroll Problems

Payroll is the lifeblood of the success of all companies. Team members perform work that generates income from which the company hopefully makes a profit. Without hard working the company does not exist. Companies should look at using the best payroll and time keeping technology available today so that payroll is paid accurately, and records are kept that make sure the company follows federal and state employment wage and hour laws. Employers need to employ strategies and policies that make sure they follow all state laws with respect to freelance and contract employees. Employers need to make sure they keep accurate time-off and sick leave records and pay employees for them accurately. Communicating all important changes to employees when they occur when it comes to payroll is critical. All employees need to be classified when it comes to their employment classification correctly, from gig workers to full-time employees. Payroll must be paid on time without fail and if it cannot be paid on time, this fact must be communicated to employees immediately.