5 Things You Can Do To Avoid Payroll Mistakes
Besides fines and angry employees, you also want to avoid penalties placed by the government because of mistakes made on your payroll taxes. Unless you outsource your payroll to a payroll service, like a professional employment organization or hire a properly trained payroll person to do your payroll and payroll taxes there are bound to be a couple mistakes. Here are five things you can do to avoid payroll mistakes.
1. Ensure Direct Deposit Info Is Entered In Correctly
Are all of your employees? direct deposit accounts entered in correctly? If you have even one number out of place, your employees? checks will not make it into their bank accounts. One way to make sure that no numbers are missed, you can have your employees attach a voided check to their direct deposit information.
2. Enter In Time Correctly
One of the easiest mistakes to avoid is entering the wrong time for an employee. Did you account for vacation? Did they get a bonus this month? What about the overtime they worked for you last week? As simple as adding an extra zero can get you into trouble and cause hours of extra work that could have been avoided. Also, the last thing you need is your employee to be getting paid for hours he/she didn?t work or not getting paid for hours that they did work.
3. Have A Two Week Lag Time On Your Payroll
Having a two week lag time on your payroll allows for you to catch any mistakes made by your hourly workers, commission that needs to be added, holiday pay etc. Giving yourself some lag time also ensures that there is enough money in your account to process payroll. Giving yourself ample time allows for you to catch any mistakes on your end as well as theirs.
4. Proper Training For Your Payroll Staff
If you have decided to do payroll in house, make sure you have taught the people doing your payroll correctly. Updating employee?s accounts and your payroll software will ensure that the person doing your payroll is set up for success. It is highly recommended that you hire a person with payroll experience or that you send your payroll staff to payroll training.
5. A System That Double Checks, Your Double Checks
Lastly, you should have a system that double checks any mistakes that you may make while processing your payroll. For example, payroll software that catches any areas you may not have entered proper information and makes sure that the information for employee matches with the information that is currently in the system.
Payroll is one of the most important aspects of your company. If you start out payroll on the right foot with properly trained staff, updated software and a two week lag time to catch mistakes, you should be prepared to make any necessary changes and fix mistakes before they happen.