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Payroll Processing Money Saving Tips for 2020 – Part Two

April 4, 2020

Kevin Kenealy

payroll processing tips

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Payroll Processing Money Saving Tips for 2020 – Part Two

Use direct deposit

Direct deposit is a convenient resource that most employees thoroughly enjoy. Having a direct deposit system enables them to be able to access their paychecks without having to wait in lines or deal with the hassle of visiting a bank each and every payday. When you get down into it, over sixty percent of United States employees use direct deposit as their primary method of payment. There are several benefits on the payroll distributor’s side as well such as reduced risk for lost checks and check fraud. You should also consider the amount of time being saved by using direct deposit. The amount of labor being utilized is to be taken into account, such as folding and stuffing checks into envelopes as well as addressing those and printing out the labels. This part of payroll administration can be not only time consuming, but also labor intensive. All of these factors eventually add up to money and company costs. Direct deposit not only saves everyone involved precious time, but the paper costs should also be considered. When you break it down, not only the paper the check is printed on but the envelope it is being sent out in and the assembly costs need to be considered. There is also the possibility that your printed checks may get lost, which will cost you all of the “stop payment” fees associated with losing a check. These are fees that your company can probably do best without.

Know How Long It’s Taking & How Much it Costs to Process Payroll

If handling your company’s payroll is a task you keep within your company, it’s quite important to accurately assess and consider the amount of time being spent to do so. Time is money and if you are dedicating a copious amount of time to handle your payroll correctly, this may be an expense that you can minimize by using some additional help. If you have followed the previous advice and have accounted for the regular hours being dedicated to keeping track of your payroll, you should also consider the time being spent on staying up-to-date with ever changing regulations, taxes, and the like. There are often mistakes that need to be corrected, record keeping that needs to stay current, and sometimes there are lost checks that need to be reissued. When you consider your payroll expenses, having an accurate idea of how much time is being allocated to handling this vital task for your business will help you determine if hiring staff exclusively for payroll services can be a more cost effective option.

Consider Outsourcing Payroll Processing

Many human resource administrative tasks can be eligible for outsourcing, including payroll processing. This task is huge when it comes to keeping your company going, however, it does not create any revenue. When you look at your potential profit margins, it may become more desirable to place your focus elsewhere that can help your business grow instead of on filling out tax forms. There are HR companies that are happy to help with these daunting aspects of running a business. Choosing to employ them will not only help with your stress level, it will allow you to focus on ways to expand and reduce payroll costs and minimize mistakes.

If you decide to handle your company’s payroll through outsourcing or internally, there are a few ways that you can save both time and money when handling one of the most important administrative aspects of your business.

Payroll Processing Money Saving Tips for 2020 – Part One

Business owners find that payroll is typically one of the biggest expenses that is encountered with running a business. Employment taxes along with wages is going to make up the vast majority of your payroll costs, but there are other things that need to be taken into consideration, like the expense of simply processing your payroll that will ultimately affect your business’ bottom line. Regardless of your company’s size, saving money is always a good priority, and here we have listed a handful of ideas on ways that you can reduce your payroll service costs.

Taking an inventory of what your company’s exact wants and needs are will greatly benefit you in the long run. Whether you handle the administrative side to payroll yourself, employ a staff member to help you, or outsource for these needs, the best way to take control of your payroll processing and save money is to have a clear idea of what exactly it is that you need done. Knowing what you are currently lacking will help you define what actions need to be taken without wasting precious time or resources to help you figure it out.

Making sure that you have accurate information on file for each individual employee is another crucial step to cutting payroll costs. Items such as the date of birth, address, social security number, and other personal identification information is extremely important to keep in your employees’ personal files. Making sure that all of these details are correct will save a lot of work and time. This is the primary step to make sure your payroll costs are not inflated. Without the need to correct information that should already be on file, you will cut the time that is required to accomplish basic tasks significantly.

Become a Payroll Tax Compliance Expert

When you look at handling the process of making payroll, there are several adjustments that you may be required to make. Tax payments, bonuses, commissions, wage adjustments and wages in general are going to need to be taken into consideration. There are several deductions that should also be accounted for.

Adjustments and deductions that will need to be made are probably going to vary with each individual employee. Making mistakes due to poorly kept files can become a big expense. When your staff expands, or your business grows beyond state borders (either the states your employees reside in or where your business is being conducted), the process of handling taxes can become much more complicated. It has been stated that 40% of small businesses are being penalized for addressing payroll taxes either late, or incorrectly. Knowing the requirements of both the state and federal legal requirements when it comes to your payroll will help you save money in more ways than one, including avoiding penalties. Not knowing what the laws and requirements are do not make you exempt from potential penalties when it comes to your state tax agencies or the IRS.