The Importance Of Payroll – Getting It Right
May 24, 2017
If you’re the owner of a small business, you’ll know that there are many roles to be fulfilled, and you may have been tempted to take all of them on, yourself. That may even prove workable if your company is very small and you have no employees, but the minute you take on a workforce – even if it’s only one or two individuals – you’ll need to ensure that payroll is completed accurately and in a timely manner, and this can be difficult to focus on if you’re running every other aspect of your business, too.
Payroll can prove crucial to the success of your business, as if your employees aren’t being paid consistently and without delays, their performance may be affected and you may even find it hard to retain them. Put simply, the financial stability of your company could be at risk if you don’t get on top of payroll.
Payroll and how it can affect employee morale:
Payroll can have a huge impact on employee morale, and as is often the case with smaller companies, a workforce may be more aware of how the business is doing financially, and may be quicker to question its integrity if payroll becomes unreliable. An employee who isn’t paid on time or in full, will soon begin to feel as if they’re not valued and will begin to care less about their job, particularly if they suspect that it may not be secure.
Employee benefits are built into payroll:
The total compensation that an employee receives, such as salary, benefits and bonuses, is built into payroll and as many employees rely on this compensation, it can have a drastic effect when it doesn’t appear in their bank accounts on time. Not only may an employee rely on these benefits for financial reasons, but what they receive is often looked upon as a reflection of how much they are valued by their employer, and if they receive their compensation on time and in full, they will naturally feel as if they are valued more. This could then lead to a higher rate of productivity and a happier workforce who may even be inclined to improve the standard of their work.
Payroll is a time-consuming job:
For any small business owner, payroll can take up a lot of time, but its importance means that you either dedicate enough time to it so that your staff are paid fairly, or you accept that you can’t cope with it alone, and you seek professional help. Outsourcing payroll means that not only should your employees pay be accurate and timely whenever its due, but that state and federal tax deposits are made on time, too.
Accurate payroll lowers state and federal taxes for small businesses:
Every owner of a small business needs to ensure that their employees fill out a W-4 form correctly, so that the information gathered can be used to withhold personal taxes for employees. Business owners must also make sure that they withhold the correct amount of FICA taxes every year from payroll, and these percentages are subject to change on an annual basis, depending on legislation.
Payroll is a vital element of any business, large or small, and getting it right can mean the difference between a content and motivated workforce, and one who performs in a lacklustre manner and doesn’t take the job seriously.
Every successful business depends on its workforce, and so boosting their morale by paying them accurately and on time, is simply in everybody’s best interests.
Outsourcing this element of your small business, should mean that your workforce remain motivated, and that they are keen to help you and your business grow.