Top 10 payroll challenges for small businesses
Small Business Payroll Service: For upon |Small businesses usually have less expertise in dealing with payroll processes, and if done incorrectly it can cause huge problems in the organization. Some of them start by paying employees inaccurately or late, being non-compliant with laws, security concerns, etc. It becomes vital to get payroll right to avoid such problems in your business.
Let’s look at some of the common payroll challenges-
1. Manual Payroll Processing
Transitioning from outdated manual processes to cloud-based payroll software is still a debatable topic for many small businesses. Manual processing is cumbersome and error-prone which can pose a huge threat to the organization.
Moreover, it overburdens employees with manual repetitive tasks which would result in low employee morale and waste of talent. That’s why it makes sense that businesses should realize with time, the importance of automation from technology using payroll software. Small Business Payroll Service.
2. Misclassification
Even small businesses are usually on board a mix of independent contractors and permanent employees. Misclassifying your employee as a contractor or vice versa can turn out to be a costly mistake for you. The companies are subject to fines for misclassification which can be as much as 100% of the employment tax due, depending on the level of culpability. Small Business Payroll Service. To explore more, you can use a pay stub creator to ensure that your employees’ pay stubs are accurate and efficient.
3. Employee absence and tracking
Tracking employees’ time and attendance is another challenge when it comes to payroll. If you are manually tracking sick time, leaves, and absences, then your payroll is bound to be more vulnerable to errors. Having an efficient cloud-based payroll software that tracks time and attendance should be your next pit stop for an error-free payroll process. Small Business Payroll Service.
4. Managing updates in information
Even minor updates or information changes can lead to payroll errors in the business. Payroll solutions give you the advantage of self-service capabilities, where employees are supposed to update information on their own, preventing any troubles for the payroll staff. Small Business Payroll Service.
5. Compliance challenges
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We can’t change the fact that laws and regulations are ever-changing. Especially for small businesses, it is imperative to keep up to date with the changing local state, and federal tax laws.
Good Payroll Software automatically alerts you of changing laws and there is no uncertainty of getting in the bad books of the government. Thanks to cloud-based payroll software like Uzio which makes multi-taxation compliance smooth for small businesses across various industries. Small Business Payroll Service.
6. Security issues
Maintaining confidential data or employee information in outdated excel spreadsheets or hard copies is not secure enough for any business. Manual payroll processing increases the possibility of data getting into the hands of the wrong person which can also cause legal issues for your business. If you still haven’t made your business secure enough to prevent it from any cybersecurity threats, it is high time you take a step. Small Business Payroll Service.
7. Costs associated with inefficiency
Hanging on to outdated payroll process methods often come at a price. The time your HR will use on repetitive manual processes, transferring data, and keeping up with paper files could have been better utilized by a digitally centralized payroll system. With the possibility of human errors while manually filling in data or general record keeping, the business remains to be prone to risk. Small Business Payroll Service.
8. Miscalculation in pay
While record-keeping, there is always a chance of human errors which can sometimes lead to mistakes in calculating the correct payment of the employees. Suppose you made a mistake while recording the attendance of an employee or accidentally misclassifying payable time, this can lead to underpaying or overpaying an employee. Whereas, automated solutions will reduce the chance of manual data entry errors. Small Business Payroll Service.
9. Hindrance in growth
For small businesses, wasting time wouldn’t be an option. If time will be utilized in repetitive outdated processes rather than using it in productive operations, this will act as a hindrance to the growth of the business. When you are exhausting critical resources on inefficient processes, you’re limiting your business’s potential for any growth. Small Business Payroll Service.
10. Backup System
Imagine your business being affected by fire or theft, and you didn’t have any proper backup in place. Even if you consider keeping backup data in a physical location, there remains the risk of data getting into the hands of the wrong person. With the use of cloud-based payroll software, you’ll stay in safe hands pun intended and your data is automatically backed up in the cloud. Small Business Payroll Service.
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