The Importance of Payroll to Small Business in 2020

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The Importance of Payroll to Businesses in 2020

Small business owners where multiple hats while running their company and 2020 is no different. Those hats include payroll, human resources, management, and sales just to name a few. Completing payroll is easily one of the most critical duties a small owner must do to run a successful business. Employees must be able to count on getting their wages on pay day with zero interruptions. Payroll impacts all components of a small business from the confidence about the company employees to the solvency of the company.

Employee Confidence

Employee confidence is tied directly to timely payroll. Large businesses are not as transparent about their financial stability as small businesses. Employees in small businesses are closer to most working aspects of the business they work for including sales, billing, collections, human resources, and payroll. In a small business if payroll is not paid on time or if payroll checks start bouncing at the bank, employees will naturally become concerned about the financial stability of the company. Employees will begin to back away from performing their job duties on time or effectively if they see they are not getting paid for work performed. For employee confidence in a business to stay positive, payroll must be paid on time.

Employee Compensation

A critical component of payroll is that gives each employee direct satisfaction about their value to a small business. Payroll demonstrates and documents each employee’s complete compensation. Employee compensation in payroll includes company paid benefits, commissions, insurances, and salary. At most companies, each employee monthly, quarterly, semi-annually, or annually, complete a performance review with the owner, their manage or their department supervisor. If an employee is doing well and meeting or exceeding their agreed job goals, they may be given an increase in salary or an annual bonus, and some instances, both are rewarded. Employee benefits also demonstrate employee’s value to the business. Small businesses that pay employee benefits like health insurance, life insurance and stocks, show to employees directly how much they mean to the company.

Payroll is a Time-Consuming Task

Small business owners spend a considerable amount of time doing payroll. Payroll has to be completed on time weekly, every two weeks or two times a month. Payroll must be 100% accurate. By law, employees are required to be paid the exact amount due to them for the time they provide their labor. Tax withholdings, insurances, and other payroll deductions all must be the correct amount and must be paid on time. To make sure payroll is paid on time and done 100% accurately and to free up a considerable amount of time, small business owners should consider outsourcing payroll.


Timely State and Federal Tax Payments

Payroll must be done correctly for business to keep in compliance with state and federal tax obligations. Penalties for not paying payroll taxes on time are significant. Employees must complete their W-4 withhold forms and it is the responsibility of small business owner to make certain of it. Employee personal taxes withholding is determined by how W-4 withholding forms are completed. Additionally, small business owner must be sure they are withholding and sending the correct amount of FICA taxes monthly and annually from payroll. Legislation can and does get enacted annually that impacts FICA amounts for withholding. It is the employers; responsibility to make sure they are complying when it comes to withholding payroll taxes. Again, this is a perfect example of why it makes sense to outsource payroll processing. Hiring a payroll processing company, like the Payroll Company, is the perfect solution to handle your small business’ payroll in 2020,

How to Improve Your Company’s Payroll Efficiency in 2020

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How to Improve Your Company's Payroll Efficiency in 2020
 - By the Payroll Company 505-944-0105
How to Improve Your Company’s Payroll Efficiency in 2020
– By the Payroll Company 505-944-0105

Working with an online payroll processing system to run your company’s payroll is not too difficult, if you select the correct payroll system provider for your company that makes the most sense. The system must have the functional features, data and reporting capabilities your company needs to run its payroll effectively. Certain online payroll providers like, the Payroll Company, for example, offer dedicated employee online portals which provide limited feature access that allows staff to update basic employee details, such as number of exemptions and employee benefit payroll deductions, for example.

Online Payroll Calendar Importance

Simplifying and improving payroll data entry is just the start. If the data needed to complete payroll does not arrive in a timely fashion, it can turn any payroll period into a disaster, no matter how amazing the new payroll processing system is subscribed to by a company. Company’s must have a payroll calendar so everyone in the company knows when payroll is due and when it will be paid.

Developing a payroll calendar is simple process that is not too time consuming. In some instances, if the new online payroll processing system a company signs up for doesn’t include a payroll calendar development tool, an excel spreadsheet will work. Most payroll software provider companies, like Albuquerque, NM, based payroll processing company, the Payroll Company, have a payroll calendar tool built into its payroll processing software.

Payroll Integration with Important Company Systems

Payroll is interdependent in most companies with several standard company business systems and department. Those systems and departments including tax, bookkeeping, accounting, timekeeping, benefits management and human resources. When a company processes payroll manually it is like juggling multiple balls in the air, which is close to impossible. To make this happen effectively and do it correctly mean all the information for each department and business system would need to be very organized and easy to access.

Signing in on for an effective payroll software program will bring all these tasks and integration into one system that ties it all together.

The top online payroll processing software packages include dynamic user-friendly integration components ready to use immediately. The minimal system that makes the most sense to sign up with must be able to connect with your company’s accounting and bookkeeping software and keep track of attendance. The system should viewable in one place from both desktop and mobile. If it has these features, it means users can handle payroll from anywhere and be able to view reports as well anytime of the day or night.

For company’s that want to implement high-level integration there are payroll software programs that feature application programming interface capabilities. This type of system allows subscribers to develop specific integration that meets the exact needs of the company, instead of just the canned features the systems includes out of the box.

Scheduled and Random Audits of Company’s Payroll System

Reviewing company payroll on a regular basis is a plain prudent strategy every business should follow. Auditing payroll should be part of a company’s ongoing monthly task list and it should also be done randomly as well. Since the beginning of time in business payroll has been a place where fraud has been perpetrated by unscrupulous people. It is much better to trust your staff, but then verify to confirm the monies being issued by payroll employee rolls match up with the company’s accounting, bookkeeping, and human resources records.

When doing a payroll audit, review the company’s payroll rules and polices. Be sure to be seek out any policies that cause misunderstanding and then change them where it makes sense to make the rules as user-friendly and easy to comply with as possible. Discuss your payroll audit with the company and ask for direct discussion and comments about issues, problems or concerns. Two sets of eyes or more are always better than one. The company staff can help identify payroll problems and bring them to the company’s attention. Do this on a regular basis to be certain all issues and problems are dealt with well and immediately.

Moving forward, complete an analysis of each phase in the company’s payroll process to check that it’s operation effectively. Consider each phase of the payroll process and then decide if each phase is needed or not.

Lastly, be certain your company’s payroll software is operating correctly. Test all integrations connected to it to see if there are any problems or real-life business mistakes that need to be corrected immediately. When it comes to critical areas like timekeeping, payroll tax compliance these areas have long lasting implications both financially and legally. Testing the company’s payroll software to check and see if it is set up and operating correctly is just smart business that will help your business stay in line in all areas connected to it and the company.

If you need assistance picking the best payroll service to meet your company’s needs, it makes sense to explore several new ones and then make the switch to one that will help your company in the best way possible.

The Biggest Employment Issues for Employers During 2019 – Part Two

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Online Benefits Administration and payroll processing

Employers deal with lots of issues regarding taxes, employee benefits, payroll processing and human resources each year and 2019 is no different. Featured below is part two of a list of the biggest issue’s businesses must stay aware of this year. The biggest issues are as follows:

  1. Cyber Attacks Security and Privacy – Today there’s constant news of ransomware, cyber-attacks and real-world invasion of workplace computers. It is critical employers take these real-world risks seriously because they are happening and impacting companies and governments directly. Company’s must take action directly to stave off risk by doing the following things: never use Social Security numbers as employee id’s; use secure email when sending sensitive information of any type; employ direct methods of destroying sensitive information by using secure shredding services; and finally, when departing from a workplace workstation completely logout of all devices.
  2. W-4 Changes – Because of the tax reform law of 2017, many updates to Form W-4 have been mandated by the federal government. However, because the updates are complex, complying with the mandated updates is not required in 2019 so the W-4 is almost the same as the 2018 W-4.
  3. Healthcare Reform for States – Federal regulations and guidelines have been changed that will impact the markets for health insurance with respect to Health Reimbursement Arrangements (HRAs), Short-term Limited Duration Insurance (STLDI), Association Health Plan (AHPs), which may end up impacting how employers provide health insurance.
  4. Employer Shared Responsibility (ESR) IRS Mandated Enforcement – Large employers need to comply with Employer Shared Responsibility. When an employer receives a 226J letter, the onus is on them to respond to the letter an provide the requested information with respect to all company departments including benefits, human resources and payroll.
  5. Department of Labor Rule Making Effect – During the U.S. Department of Labor fall 2018 regulatory agenda it was communicated that the its Wage and Hour Department was going to issue several Notices of Proposed Rule Making regarding many regulations which would impact virtually all employers. The biggest change being made was to overtime regulations, but there were many other changes to regulation effecting the rate of pay. These changes would not go into effect most likely until March 2019.

The Final Word on Employer Legal Issue Awareness

Companies need to be sure they are in compliance with respect to all employer laws and regulation mandated by both State and Federal government entities. It is in a company’s best interest to be aware of the biggest issues of the day and make sure it is compliance with all rules and regulations.

Payroll Processing Outsourcing Plus & Minuses – Part Two

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Take a minute to review the pluses and minuses
of switching your business to an outside payroll processing services provider.
Featured below are both the pluses and the minuses.


  • Time savings – Several surveys over the years completed by a variety of business associations have reported that business owners place payroll and payroll taxes as the number 2 task that takes up the most time and creates the most hassle of all the tasks categories it takes to run a successful business. It’s obvious that running payroll 1 to 4 times a month requires a ton of time and focus to complete. Switching to an outside payroll processing service provider frees up time and improves effectiveness for most business owners.
  • Reduction in Expenses – Each pay period requires completion of a long list of required tasks including preparing and paying mandatory payroll taxes, running payroll reports, figuring out wages for the entire company staff, printing, signing and handing out payroll checks.
  • Better Company and Employee Data Security – In 2019 payroll processing service providers provide, mirrored backup systems, several server farms, the most up-to-date technology, solid secure SSL (secure socket layer) firewall protected systems to safeguard private employee and company information and data.
  • Keeping Current with Regulations – It is hard to stay compliant and current with payroll tax laws and payroll taxes. The financial penalties are huge. Payroll processing service providers know all the rules and regulations like the back of their hand. Their primary objective in running their business is implement this knowledge, process your payroll for your company and keep you current with all requirements and regulations.


  • Ease of Use Getting Wage Reporting and Employee
    Certain payroll processing service providers do not offer reporting
    on payroll costs and other critical data about employees due to the fact they
    do not have the information or because the data is on their servers, which your
    business does get access to for various reasons.
  • Time Issues on Fixing Payroll Mistakes –
    Payroll companies are sometimes slow to respond to payroll errors. If the
    company or the employee needs aren’t met when it comes to payroll errors, it is
    bad for everyone.
  • Payroll Services Pricing –
    In some instances payroll processing service providers do not customize pricing
    to fit a company’s needs. Check to make sure the services provided fit your company’s
    needs and not the other way around.
  • Chance Your Payroll Processing Provider Closes
    Its Doors
     – Businesses close all the time. It can be due failure,
    loss of a primary partner or any number of reasons.  If this were to happen to your business, you
    may lose out on access to company payroll data, employee data and potentially
    your company’s money.  

minuses described here do not have to be part of your picture. The main thing
to make sure you do is your due diligence in checking out the company thoroughly
first. Use the following guidelines to make a smart payroll processing service
provider choice:

  • Recommendations from associates, mentors and business owners
  • Documented credentials including time in business, similar company
    payroll processing experience and confirmed business licenses.
  • Confirmed quality customer service and personal attention to
  • Services and support offered meet your company’s needs
  • Pricing and additional fees or charges are documented upfront
  • Reporting of data, data reporting needs and security of data are
    rock solid

Payroll Processing Outsourcing Plus & Minuses – Part One

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In today’s modern web-based technology world,
companies can choose from multiple options to complete payroll. Business owners
that opt to do it themselves is one way and businesses that choose to assign
the task of doing payroll to a department, like human resources, is another way
to go. Lots of businesses choose to go to a provider outside the company for
payroll processing like a bookkeeper, accounting firm or an online payroll
processing company. The rub lies in figuring out which method is the best way
for your company to do its payroll.

Small-business owners need to take a hard look
at where their time is best spent. Look at how much time is being spent now by
you each month doing the company payroll. If the answer is too much where for a
small monthly fee payroll is completed and the time is gain is used closing new
sales. Review your payroll to make sure you are current with all state and
federal laws, rules and payroll regulations. If you’re not sure or you’re not
current, it might be time to switch to hiring a payroll processing provider.
Look to see if you’re keeping all your company’s and your employee’s financial
data well secured and private. Also, check to make sure your company’s records
for wages, benefits and retirement programs are on time, current and correct.

Payroll Processing Success, But Is It Taking
You Away from Important Tasks

You are managing running your company’s payroll successfully. However, if keeping up with running payroll, maintaining legal requirements, data security and records is eating up a good amount of your time, you may want to switch to outsourcing payroll to an online payroll processing company. Payroll processing company will calculate your company’s payroll and its associated taxes, print and handout checks, complete direct deposit payroll checks and complete all the company’s payroll reports. It will file payroll taxes, issue annual Forms W-2, set up worker’s 401(k) deductions and connect their contributions to investment account providers and keep records on benefits of employees.

Why Outsourcing Payroll Processing is a Smart Move for Your Business

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Businesses are required to complete and meet obligations to employees. Payroll problems are difficult for today’s high-tech business world. A business’s payroll division oversees multiple components of employee compensation. It manages payroll processing, direct deposits to employee’s bank account, FICA, FICO, State Income tax payments to government entities including the State and the Federal Government, reporting requirements, time and attendance tracking, company payroll management reports, worker’s compensation, 401k’s plus other types of retirement account reporting, unemployment claims, vacation time-off and more. This is a giant set of tasks to manage for a small business while running the business itself. Putting time into these tasks means a business owner is not focusing on building and managing current business.

What is the Appropriate Amount of Time to Spend on Payroll?

The practical way to answer this inquiry is a business owner needs to calculate the amount of time spent working on payroll each week, every two weeks or month and multiply it out for 52 weeks, 26 weeks or 12 months. After the totals for each segment of time are calculated, a business owner needs to look at the true cost of working on payroll by comparing it to the amount of business not generated related to working on payroll instead of managing and building the business. To make the comparison and analysis useful and valid each payroll task needs to be included in the assessment including managing tax reporting, employee benefits, retirement funds to new name just a few. Several studies over the years indicated in real numbers that business owners spend 3 full weeks a year dealing with federal tax problems. Add all the hours spent dealing with all the other payroll problems and tasks and it becomes readily obvious managing payroll is costly from both a time and business growth perspective. There’s not a fixed number or an empirical study out there that provides when a business owner should hire a payroll processing company, instead of doing it themselves. However, it’s easy to assess if an owner is spending 10 – 20 % of their time working on payroll and all its accompanying issues it’s likely a smart move to hire a company to process payroll to save time and money and then put those savings into managing and building business.

Look at the questions below to determine if it’s time to hire an outside payroll processing company:

  • Is the time spent on payroll exceeding your comfort level?
  • Is your business growing, adding more employees and now is
    payroll becoming a much bigger task than before?
  • Are payroll mishaps become more costly due to tax penalties assessed
    for filing errors charged by the IRS?
  • Is payroll taking up so much time that the critical time needed
    to manage and grow your business is compromised.

From a logical assessment perspective, if the responses to this set of questions happen to be yes, it’s makes good sense to outsource payroll processing. The monthly cost of payroll processing fees, while not nominal, is affordable for most businesses. The benefits of outsourcing payroll processing are time-savings, cost savings generated from reduction in penalties and fines and the improved ability to focus time on and energy towards building and growing your business.

Why It’s Critical Payroll Must Be Paid On Time and Precisely in 2019 & Beyond

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In 2019, more than ever, it is a fact it is the responsibility of every company, business and corporation to make certain that staff members are precisely compensated for different sets of hours worked. Even though employers know it is a legal requirement to for business to pay workers for the hours worked, employees do not always get paid the amount of wages they have coming.

In some cases, this might be intentional, however possibilities are great that typically, it is caused by an oversight. Charged with the duty of producing accurate wage information, it is up to Human Resources to maintain a Human Resources system that can track the necessary details to make sure workers are compensated properly for hours worked.

Also, it is a fact, large businesses are vulnerable to problems when it concerns payroll. It has been reported in recent years that several big employers were found to have kept millions of dollars in overtime back earnings. According to information provided to the US Department of Labor, which performed the investigation, each of these companies have “fallen far short of keeping accurate records and had not paid employees for thousands of hours worked.”

Paying staff members in a prompt and 100% accurate fashion is a fundamental part of keeping employees pleased with their job and willing to work hard for your company. Since it depends on Human Resources to aid and retain valued employees, it remains in the best interest of all businesses that employees are paid what they are owed. It is likewise a vital action in lawful conformity, people by law are required to be paid for the time they perform services, nothing less and nothing more.

Taking care of HR, and wage and hour details, can be a difficult job. A skilled HR consulting business or payroll processing company will certainly collaborate with your company to execute the Human Resources and payroll software application systems that meets the one-of-a-kind demands of your business, helping make sure that payroll is accurate, and your business stays in compliance with wage and hour laws.

Top Payroll Issues that May Doom Your Business in 2019

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Businesses fail all the time and there are several issues that cause those failures. It’s a fact that payroll in the year 2019 may be the one that comes back to bite a business that it never even considered a risk area unless it takes action now. However, one way to mitigate that risk is use workforce management software and integrated payroll service. It’s a fact small 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 really 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 companies payroll period are staff hours worked and making sure necessary funds are in the bank to fund the paychecks being disbursed. Using a 3rd 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.

  1. 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.

  1. 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 are able to 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.

  1. 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 mind set 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.

  1. 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 time cards
  • 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 together 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.

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