We take a look at how payroll best practices can increase your business income. Hopefully, the items we put together manage to convince you to up your payroll system.
All employees work for money, which means that payroll is one of their most important concerns and therefore is one of the things you should be paying the most attention to. However, it does take a lot of work sometimes and is in fact widely dreaded in nearly any industry.
However, there are many reasons to engage in the best practices in payroll. One of these reasons is that it increases your income. Having a competitive and systematic payroll system in place indirectly boosts your earnings through several different routes.
In this article, we take a look at how payroll best practices can increase your business income. Hopefully, the items we put together manage to convince you to up your payroll system.
What You Need
You do not need anything aside from time and focus at this point. Keep an open mind, and be receptive to new ideas or thoughts that may not be perfectly in sync with yours. That way, you prepare your business for beneficial changes in the future.
Increase Your Income Through Payroll Best Practices
#1 Keep your finances on track
Although you can argue that people from centuries ago were able to keep their finances on track using archaic systems, the capability of a good payroll system to keep your money in order is still undeniable.
Sure, you can insist to do everything on paper or some outdated software or spreadsheet, but having a robust system with just the right features for your business type and size can help you improve your tracking.
When you are able to see “the big picture” at a glance, you can quickly see where you stand and can strategize accordingly.
#2 Have happy employees
Your employees look forward to their pay because they need it, deserve it, and are entitled to it. When your payroll system is equipped with the right tools and runs smoothly, your employees are paid correctly and promptly. This benefit becomes even more important during tax season, when everybody (including you!) is scrambling to get relevant documents in order.
When your employees are happy, they perform better, which means improved output and of course, increased income.
#3 Improve efficiency
One of the most noticeable improvements you will see when you ramp up your payroll is the improvement in efficiency. With an updated payroll system, you get rid of a lot of paperwork, thereby saving on space and spending on supplies.
You also get to find and track information more quickly than when dealing with a paper-based payroll system. This way, results are provided quickly, potential problems are easily found and prevented, and existing problems can be resolved immediately.
This includes the way your employees are paid. The majority of businesses in urbanized countries are now using direct deposit to pay workers. In case you are one of the few who are still paying by check, we strongly encourage you to try doing it through DDA as well. This option has less room for error than check-based payments. You also get to save time and money by not having to write checks anymore.
Moreover, having a good payroll system makes onboarding and offboarding faster and easier. In the past, whenever an employee joined or left the company, that meant new paperwork for payroll right away. You do not have to go through that inconvenience now.
#4 Avoid legal problems
A lot of companies get into legal trouble for seemingly small mistakes, a common example of which is classification error. Sometimes, an employee income gets classified as exempt when it should not be, and vice versa.
Aside from messing up your books, this error can lead to potentially costly problems, such as when an employee does not get paid for overtime work. The best case scenario here is that the employee brings it up, you correct it right away, and the employee walks out of your office satisfied.
However, these situations often end up in threats of (and many times, actual) litigation. You can shell out to settle or go through with the case, paying legal fees and more.
#5 Increase security
Payroll documents contain sensitive and confidential data about your business and your employees. These information can be compromised by outdated payroll systems, thereby endangering your business and employee information. You will have to spend considerably to resolve an issue like this.
When you have a secure payroll system in place, you avoid such potential problems and their accompanying costs. Moreover, you get to reassure your employees that their information is safe, thus giving them a sense of security and confidence in working with you, which leads to improved employee performance.
Upgrading your payroll system is not cheap initially. However, it offers numerous benefits that all ultimately lead to higher business income, thereby making it a worthy investment. By keeping your payroll system up to date, you get to keep track of your finances better, motivate your employees to work better, improve efficiency and security, and avoid costly legal problems. All of these benefits, albeit not all directly, increase your income.
We hope you found this brief guide helpful and informative, and do feel free to share it with your friends. Leave a comment to let us know what you think!