Owning a business, being the boss is great on all fronts, most of the time. Many employers dread payroll responsibilities as they require much more of their valuable time and energy they would rather put towards other matters, like creating more revenue or enjoying their life. Hiring an outside company to perform payroll isn’t always an option for the smaller businesses, even when business is booming.
While experiencing an expansion in business is typically not a problem, managing payroll, while juggling other necessary commercial duties, can become taxing on a small- or medium-size business owner. Add the stress of possible inaccurate or late deposits, which could result in high interest charges and penalties, and a business owner, could imagine themselves closing shop.
Here are three ways manage payroll while your business rapidly expands:
1. Exceed Scheduled Tax Payments
When it comes to state and federal payroll tax payments, a business should set a schedule for each of the payments which exceed the legal requirements. Because payroll taxes are a large source of revenue for government agencies, failure to meet deadlines results in enormous penalties for business owners.
2. Build Redundancy
When business is expanding, owners typically react in one of two ways: they let go or delegate responsibility of a few significant responsibilities or they take on additional duties believing no one can do the job as well as they can. By training two or three management staff members on the workings of the company payroll system, employees will be able to receive answers to important questions without having to wait. When you or your payroll manager need to be out of the office, having another person or two trained on the ins and outs of your specific payroll system helps boost employee confidence as well as keep things running on time.
3. Pay the Correct Amount
When it comes to payroll, one can never check too many times for accuracy – and for many businesses, this strain on resources many indicate it is time to hire a third party payroll manager. State and federal tax laws change several times a year and if a business owner does not keep up with these changes, they could be paying too little or too much. If an underpayment occurs, there are severe penalties which include additional payments and could lead to jail time. Over-payments simply cost businesses money they could be using for improvements or employee benefits and the like.
No matter if a business owner calculates payroll taxes themselves has them done by an outside service or an accountant, the business owner is always responsible according to the law. Accuracy and timeliness are critical to the success of a payroll system. Keep this in mind when choosing which direction your business’s payroll will go as you add employees, merchandise, deliveries and your business continues to expand.