Managing a young business can be an arduous process, whether it’s your own or someone else’s. You’re learning by the day, that there isn’t really a guidebook to help you fix goof-ups quickly, and you’re relying on generic tools to get you by. In the midst of all this, you’re probably managing HR and payroll on spreadsheets, attendance registers, or via other manual means.
Having an organized payroll system with ordered bookkeeping from the get-go can be a life-saver for startups. Besides eliminating the need for deployment of human resource, it can help identify effective usage of funds, monitor cashflow, and sort legal compliance.
Here are some things to consider while setting up your payroll services.
All businesses have to project annual profits or losses, which need estimation of incomes and expenditures. Planning payroll services during the annual budgeting process can help with projection accuracy. Make sure to collect all pertinent employee information right at the recruitment stage to avoid lapses.
Evaluate Payroll Systems
It is important to choose the right payroll management software for your organization that fits the size as well as budget. Also, software scalability is an added bonus for when your company expands, while transferability can save multitudes in case you want to transition to a new platform later.
Consider Payroll Outsourcing Services
If you can afford to, hire a professional accountant to take care of payroll management. Otherwise, outsourcing can be an option.
Though it might seem a little too early to consider payroll outsourcing services, choosing to trust a third-party vendor can make HR processes hassle-free. It’s common knowledge that those in startups don multiple hats, but this is one activity that you can take off your plate.
Many providers will manage compliance, file tax returns, and handle full-time or contract employee payments at affordable rates. Just like choosing an in-house system, evaluate scalability and transferability, in addition to prioritizing security and cloud-based services.
Maintain Payroll Records
Irrespective of which route you choose, ensure that your payroll records are in place for auditing. While legally companies can be asked to produce records for a minimum of three years, keeping records for five years is considered good practice. Maintaining internal records or having outsourcing partners furnish regular updates can also help avoid fraudulent activities.
Treating HR and payroll management as an integral part of your business process is imperative for smooth functioning. Neglecting it in the initial stages can prove to be problematic later in the growth cycle.