Essential Payroll Capabilities and Why They Matter
AdminAssistSeptember 30, 2020
From direct deposit to wage garnishments, there are a lot of complex tasks that a payroll system needs to handle. But for ill-equipped or small companies, this process can be extremely labor-intensive. It’s important that employees feel they can trust your company to deliver their wages on time. Plus, you need to ensure that your accounting team is keeping an eye on compliance.
Here are some key payroll capabilities that your accounting department should be able to handle. If not, you might want to consider outsourcing your accounting needs to an outside firm. One study indicates that payroll mistakes happen two times as often in internal payroll solutions when compared to third-party solutions. Let’s review payroll capabilities and why they’re so important to get right.
In today’s world, direct deposit is an absolute necessity. Small businesses should set up direct deposit for fast and seamless payments for employers and vendors. No more writing checks, making mistakes, looking up information on Excel sheets, and licking postage stamps.
Why is direct deposit important? It is the most reliable way to manage invoicing and payroll. Automation means that nobody has to remember to send out checks. Employees know what to expect and when to expect it. This builds trust between workers and employers. Outsourcing accounting to a partner firm can be a great solution for businesses that are struggling to stay on top of payroll.
When someone from your team goes on a trip, they are entitled to a per diem. This small fee is meant to cover lodging, food, and other incidental expenses while traveling and conducting business on behalf of the company. Most casual payroll software isn’t built to handle per diems. However, if you have salespeople or executives who regularly travel, then it might be time to look for a payroll solution that can easily dole out per diem payments.
Keeping all your company’s financials in one place is a major benefit of outsourcing accounting to a firm. If your company is growing, or if it simply sends people out into the field quite frequently, then you need a payroll solution that can handle per diems. Simple as that.
Uh oh, someone at your company hasn’t been paying their taxes. It is now your company’s responsibility to check their payrolls and implement wage garnishment in cooperation with the government. If this sounds like a headache, that’s probably because your accounting department is already overwhelmed.
It’s crucial that you have a payroll solution that can handle requests for garnishments. Compliance is the name of the game when it comes to a good relationship with the IRS. Don’t make it any harder than it has to be by holding up the process. Choose a payroll system that can easily handle garnishments and make sure you train your people on how to handle this situation -- or you could just outsource it.
Paid Time Off
When someone takes PTO, they expect their wages to appear seamlessly in their bank account. On the front-end, not much needs to change from a payroll perspective. The money is sent and that’s it. Your employee is off on vacation, or sick leave, or somewhere else. Time off is an important part of work-life balance and it’s great that your company provides it.
However, on the back-end, your payroll team needs to be tracking the PTO on the employee’s file. Some states require reporting of PTO on the pay stub itself. Otherwise, it’s just good practice to note how much time someone has taken and when.
There are still occasions when a company-branded check is appropriate. Some old-fashioned employees may prefer physical checks. This could be for a variety of reasons. They might wish to cash a check in exchange for bills. They might be undocumented or they might not have a bank account. Your payroll team should have the capacity to easily generate official, company-branded checks on demand.
Company-branded checks along with direct deposit should be able to meet the needs of all your employees. It’s critical to have this figured out ahead of time. Some employees can’t wait two weeks while your accounting department orders the right paper, sets up the printer, and figures out how to do physical checks. If you’d rather not deal with all of that yourself, then work with an outside accounting firm that can answer all your employees’ questions.
Pay Stub Delivery
Not only do you need to give your employees wages, but you need to show them exactly how much they earned and how much is being deducted for taxes. Pay stub delivery is done via email or snail mail. It’s a document that cumulatively presents the employee’s financial history at the company. Typically, these are issued every pay period.
Different locations have different laws about pay stub delivery. You might be required to present printed pay stubs to your employees in some states. Otherwise, an online payroll system could be a good solution. This way, employees can access their pay stub history on demand. It is seamless, reliable, and integrated with the other accounting tasks within your company.
This is the best part of doing business -- if you’re a nerd like us, that is! Seeing the data represented in a clean and intuitive report is a powerful way to make decisions. Your payroll system should have the capacity to easily generate reports about absenteeism, pay rates, overtime worked, and more.
Great reports can help individual employees understand their financial history at the company in a single glance. It can also help executives grasp patterns in behavior and make decisions about human capital based on that data.
If your payroll solution can’t handle all of these capabilities, it might be time to look into an upgrade. Today, employees want 24/7 access to their data. They will demand total transparency and accountability, and they will expect problems to be resolved quickly and confidently. Consistent and accurate payroll is the best way to build a strong relationship with employees. It’s worth investing in an accounting solution that can meet these needs. Our team here at AdminAssist is ready to speak with you. Contact us to review your options for outsourced payroll and accounting solutions.