By 2015, human resources outsourcing is expected to reach nearly $162 billion in the United States. That number might seem shocking, but considering the many difficulties associated with payroll and benefits procedures, it is often a necessity. Payroll processing services are complex, but business owners need them to be precise in order to make sure employees are compensated properly every week. But before you outsource that work, you should try to take steps that make your business’ procedures more efficient. A good way to do that is to develop an easy-to-follow payroll processing checklist and sticking to it during every pay period.
Time Keeping
Before paying employees, make sure that recorded hours are accurate. If an employee accidentally recorded too many hours, they could cost you a lot of money on OT and cost themselves money if a clerical error shortens their hours. Double-checking hours and making edits should be one of the first steps on every payroll processing checklist.
Process Wages
Simply multiplying hours by rate is not always the only step that goes into calculating paychecks. Things like bonuses, commissions, overtime, reimbursements, and even deductions can all influence how much is in a paycheck, and small errors can be quite costly. Reviewing all of those factors is always important.
Paychecks vs. Direct Deposit
Businesses vary in terms of how they pay their employees. While some use direct deposit exclusively, others will give employees the option of direct deposit and actually getting a paycheck. Keeping tabs on that is an important, although often tedious, part of any payroll processing checklist. If a mistake is made, employees may fail to get paid at all!
Reporting
Every year, according to statistics from the IRS, around 40% of companies pay an average of $845 in penalties because of bookkeeping and reporting errors. Generating accurate reports is vital for avoiding penalties, which can be quite costly to businesses who need to operate with a tight budget. Proper reporting might be a bit time consuming, but is a must to today’s businesses.
If you’re looking to improve payroll systems and be able to more efficiently pay employees properly during every pay period, then developing a checklist might be the smartest first step. While outsourcing that work has its place, and could end up being the best option in the long run, a checklist can help you avoid oversights and potentially costly mistakes. Find more: www.ioipay.com