Payroll is an essential process of any small business – no matter if you are paying yourself or ten employees. When it comes down to it, the efficiency of your payroll system will ensure the efficiency of your business. A disorganized system can make taxes more of a hassle and you may experience more disputes with your employees. If you plan on taking on payroll yourself and not using a service, like the one provided by Big Fish Payroll Services, you need to know some of the basics. If you don’t know these basics, it will be tough to get your workers paid in time and you will wind up burying yourself in paper work. Here are some DIY small business payroll basics.
- Make sure that you get all of your employees’ information. One of the most important things to think about for the payroll process is your employees’ information. Not only do you want to get their names, addresses, phone numbers and other information – you also want to get their social security numbers. An employee’s social security number will be integral when you start drafting paychecks and deducting taxes accordingly.
- Make sure that your employees have the correct classification. When you hire an employee, you want to make sure that they have the correct classification in terms of tax status. For instance, an employee that works from home may be considered a contract employee. On the other hand, you may have an employee that works full time in the office. Both employees will need to sign different tax forms.
- Make sure to be timely about your payroll process. Another basic tip about payroll is that you need to pay your employees on time. If you don’t pay on time, you will have a lot of disgruntled employees on your hands. Moreover, it will start to mess with your cash flow. If you send out paychecks too close together, it will start to conflict with your cash flow and it will make it more and more difficult to manage your small business. When it comes down to it, you can keep a calendar handy if you can’t seem to stick to a schedule.
- Make sure to deduct the right amount of taxes. To make sure that you are deducting the right amount of taxes, you want to consult with an accountant. For one thing, you don’t want to deduct too much, because your employees won’t be very happy. Also, you don’t want to deduct too little, because it could result in an audit or your employees could get pounded by the taxman, which is something you definitely don’t want.
- Make sure that payroll doesn’t take over your life. Ideally, you want payroll to be an easygoing process. You don’t want to spend too much time on it. If you are spending your life managing and worrying about payroll, you definitely want to hire a payroll service. In the end, it is your job to run your business – payroll should be a part of the process, but it shouldn’t be the whole process.