The payroll process: 7 tips to manage it effectively

The payroll process needs employers to be mindful on the documentation of the hours worked by their employee and to requite them for the services contributed. The process can be time-consuming and demanding as employers need to adhere to the latest local, state and federal mandates about payroll taxes, benefits and worker’s compensation. Employers can choose to do the payroll themselves or source it out to payroll-service companies. Here are seven tips on how to manage your payroll process effectively:

1.     Conduct regular audits 

The most effective way is to separate and identify an issue by wide-ranging workflow analysis, detailing each step of the process from beginning to the end. An effective audit includes:

• Ensuring each part of the process runs smoothly, and always double-checking all paperwork.
• Ensuring the payroll software is installed correctly based on your time and attendance system. Testing the plugins or add-ons is encouraged. 
• Installing a check-in system or a biometric sign-in hardware if you need to take note the times an employee signs in or swipes a card

2.     Implement a transparent payroll policy

It is easy for an employee to misunderstand the payroll system. Pay policies in most companies are either not attainable or meagrely presented to employees  which may cause  problems, such as underpaid taxes or employee misclassifications. You could avoid such problems by implementing transparent payroll policy. The information should be included in the payroll policy as follows:

• Process of payroll
• Classification of employees
• Salaries determination
• Reporting responsibilities of an employee
• Procedures for handling payroll mistakes 
• Different levels of vocational earnings 
• The calculation method of wages and promotions 

Display the policy if needed throughout the workplace. It will be splendid to make sure every employee has a copy of the payroll policy. 

3.     Cast about employee’s feedback 

Communicating with employees to know if they understand the payroll process even when the policy is transparent. You can find out if there’s any confusion such as wrong steps in submitting a timesheet or any time card related issue. Organise meetings to discuss about payroll issues such as asking the employees how the payroll process works for them or what areas can be improved. Don’t be startled with the creative opinions you receive! You may consider a company-widesurvey on all managers to understand their satisfaction level on the existing procedures. With this method, you can encourage employees to support the new implemented payroll process. 

4.     Go paperless 

Going paperless helps you save time and resources. There’s also less paperwork to handle as you do not need to keep many documents and take up spaces in the company. Here are some reasons why you should go paperless: 

• The employee does not need to pick up their checks.
• Convenient where employees can log in and view their pay stub from an online portal.
• Since salary payment is sent through a bank account, it will be easier for you to manage if an employee quits or get fired.

5.     Upgrade your software 

It is essential to stay updated with the payroll software that you are using. Otherwise, your employees might find it difficult to open the software or works too slow. Updated software saves you time in saving employees information and make any update easily. There is also software out there that helps you to calculate the cost of the project and different pay scales depending on the employee’s title. A good software will help you to reduce any issues related to accuracy and time management. 

6.     Keep yourself updated with the law 

You need to keep yourself updated with the tax laws, particularly the state and federal taxes. You will be able to avoid any penalties and any problems that might arise for not staying abide with the law. Both you and employee can refrain from filling up any amended returns and getting your tax return on time. 

7.     Outsource your payroll 

Processing payroll, hiring and managing employees can often be the last thing on your mind when you are occupied with your work or business. You might even need to do overtime to get these tasks done to ensure your employees receive their pay on time. Besides, it will be easy for you to overlook and make mistakes as you will get tired and frustrated. Therefore, outsource your payroll needs and find yourself with these benefits:

• No need to worry about doing the payday.
• If there’s any problem arise, pass your employee contact information to the payroll company.
• Give you more time to stay focus on your business or company. 
• Not drowned with workload.

Many companies have discussed that outsourcing your payroll is expensive. But, think of how a payroll company can help to make sure the records are correct and handle any issue that arises about pay. They could save you a lot of time and effort trying to solve them, knowing that they are skilled and up to date! 

The world is currently adapting to the new normal. Many companies have been resuming their operations and trying to survive the unparalleled financial challenges these days. Are you also facing the same crisis as the other companies currently? Outsource your payroll needs to the experts as they are familiar with all problems that may arise from the payroll audits. Besides, they also help you to save time and focus on your other duties or your business! 

As the world-leading workforce solution in Malaysia, we can help each client’s needs in the workforce! Email us at marketing.my@adecco.com or call us now for more information on our services.