Payroll issues are one of the most common problems that small businesses experience on a daily basis. According to recent statistics, payroll errors alone account for about $7 billion in losses per year. Unfortunately, the lion’s share of these errors can be blamed on lack of proper training or failure to keep up with the ever-changing laws regarding payroll. If you find yourself facing payroll challenges on an ongoing basis, don’t worry; there are some easy ways to deal with them. Here are the main challenges SMBs face when it comes to payroll and how to overcome them.
The Pressure is Building to Adopt Payroll Flexibility
How many times have you heard someone say, I’d love to hire more people, but I can’t afford to lose our payroll efficiency? For businesses with fewer than 100 employees, finding ways to increase payroll flexibility while maintaining or even reducing costs is critical. The last thing they want is to choke growth by adding labor costs that eat up cash flow. At the same time, business owners are facing intense pressure from aging baby boomers who want—and expect—to stay in their jobs longer. small-business owners are struggling to cope with rising health care costs and other expenses by switching to an automated system that takes care of all the payroll, tax, and wages of the employees without any effort. Also, employees are more concerned about the transparency in the payroll system which has increased the pressure on business owners to be flexible in this case.
Paying employees who work from home while keeping track of absences
While a large percentage of US employers now allow their workers to work from home, there are a lot of challenges associated with it. If you’re paying employees who work from home or have contractors in multiple states, it can be hard to keep track of all their hours worked and jobs completed. In an effort to combat these issues, many companies use time tracking software integrated with payroll software that is helpful specifically for remote workers. When done properly, HR departments find that using time tracking software increases employee productivity. As a result, they’re able to reduce payroll costs by making more efficient use of staff members’ hours worked.
Changing legal frameworks and understanding new legislation
Even though you might be familiar with how you pay your employees, there are always new legal frameworks that you’ll need to understand and new legislation that may affect you. For example, did you know that in 2019 (and 2020), every business in Europe will be required to report their gender pay gap? Or, if you have employees in California, is there anything special about overtime compensation? Make sure you read up on these things so they don’t come as a surprise when it’s time to file taxes. It is very important to understand the complexities of payroll-related law—it can be well worth it for peace of mind. In most cases, an annual investment of between $500 and $1,000 in an accountant or bookkeeper pays for itself many times over in terms of reduced stress and billable hours. However, having software onboard that specializes in administrative tasks like filing taxes can save even more money while increasing productivity.
Adopting flexible and efficient payroll solution
Small businesses traditionally had difficulty finding payroll services that suit their needs. Typically, they’re forced to either do their own payroll manually or sign up for a complicated software solution. There are now great solutions on the market that make it easy for small businesses to implement flexible and efficient payroll processes—without breaking their budgets. Flexible solutions allow companies to be both flexible and save money. Time-saving: You could spend countless hours doing your payroll yourself—but why bother? A good product will streamline every aspect of your business’s financial life cycle by digitizing forms and files so they can be easily achieved online (wherever you like). Another perk? A well-designed system will generate reports automatically—cutting down even more of your busy work each month. And since programs usually work with other business tools, all your information will live in one place.