Payroll Basics for Small Businesses: 6 Tips to Keep You Out of Financial Trouble
Saturday, September 5, 2015, 6:00 AM | Leave Comment
By starting your own business, you have achieved a goal that many people dream of completing in their lifetime. Now that you have your product, company name, employees and target market figured out, what’s next? You’ll have to tackle the basics of small business finances, specifically payroll.
After all, you need to pay yourself and employees in an organized and legally compliant way.
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Don’t Go It Alone
If payroll is the one aspect of owning a business that has your stomach tied up in knots, don’t worry. You don’t have to start from scratch. Rely on the expertise of those who have come before you. You can either hire an accountant to dedicate themselves to company finances, or use computer software to keep finances in order yourself.
You can find many types of business finance software out there, from basic tasks (such as employee time cards) to full-service payroll. Choose the software that fits your needs, and see how easy it is to manage business finances.
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Track Employee Hours
Speaking of employee time cards, it’s important to track employee hours in a transparent and convenient way. After all, time is money. Using accurate time cards is how you determine how much to pay each employee, so you need to come up with a system that fits your business.
For example, if your business is computer-based, use a system like BuddyPunch or WorkPuls. If your employees are on the go for work, have them download a timecard app such as TSHEETS to manage their hours.
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Remember Overtime
Don’t forget about overtime when hiring employees. In most states, you are required to pay 1.5 times your employee’s hourly pay for any hours worked over 40 in a work week. Set up an overtime policy early in your business so employees know what to expect. Always look to your budget to determine if you can afford paying overtime.
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Set Up Vacation & Sick Day Standards
Another standard to set early on is about vacation and sick days. Your employees will expect policies on paid vs. unpaid vacation. Will sick days count as vacation days, or be separate? Look at the standards within your industry to determine a fair amount of sick and vacation days.
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Master Tax Basics
Once you have employee time and reimbursement under control, learn about tax basics for businesses. You will have to pay federal and state income taxes for your business and each employee. Look up deadlines for your state so you don’t incur a fee.
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Print Pay Stubs the Easy Way
Lastly, use technology like a pay stub automator to make your life easier. Use a website to plug in employee hours and deductions, and it will automatically calculate wages, withholdings, health care, and retirement deductions for you. It’s important to get pay stubs right so your employees receive fair compensation and your taxes are correct.
Here are a few tips to help you breeze through payroll and stay out of financial trouble.
With these tips, you can be well on your way to mastering business finances. It’s important to use online tools and get the help of experts when it comes to your finance so you can avoid costly mistakes.
Informational credit to Check Stub Maker.
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