Running your own small business can be tough in itself, let alone when you have to deal with payroll. Why do you ask? You have to make the choice whether you’re going to do the payroll yourself or whether you’re going to outsource payroll. It doesn’t matter which one you choose, as long as it is convenient for you. To get the best out of managing payroll, read our tips below.
Rules of the IRS
Before handling any payroll documents, make sure that they are according to the IRS rules and regulations. These are called the compliance standards of the IRS and include for example knowing the labor laws and the employer identification number (EIN).
There are several federal payroll reports that you must submit. Normally, you file federal payroll reports with the Internal Revenue Service (IRS). You may need to file a report more frequently (e.g., quarterly) or less frequently (e.g., annual basis) depending on the type of report .
It’s also worth noting that due dates differ from state to state. One state, for example, may require you to complete a quarterly form by the end of the month after quarter-end. A different state, on the other hand, may require you to file a similar form by the 15th of the following month.
At the end of the day, you want to avoid getting penalties from the IRS. In case you’re not sure about certain laws, you could always have a look at the website or get in touch with a payroll company.
Careful Revision of Documents
Make sure you check your data thoroughly before entering them definitively in the system. It is very easy to make a mistake when it comes to numbers and in the case if payroll, it could lead to losses. In order to avoid these mistakes, it could be an idea to ask an accountant for advice or even get advice from a payroll company that is specialized in small businesses.
Deadlines
Another important tip to handle the payroll of your small business is to keep the deadlines in check. Once you have the dates finalized, it can make your workflow easier as you have something to complete in the future. Not only is it easier for the payroll process, but it also avoids getting penalized by the IRS as you need to hand in the papers and documents on time.
Software Use
One practical and technical advice would be to start using a payroll software. The advantage of this software is that it decreases the chance to make mistakes when entering data manually. This way, you’ll have a complete overview of the entire payroll process, you’ll save yourself plenty of time for other important tasks, and it will make your work easier as it is automated and not manually done. What’s more, due to the decreased chances of making mistakes, you could end up saving money rather than losing money.
Stay Up to Date
As a small business owner it is important to be on top of the constantly changing laws, especially when it comes to payroll as this could result in saving money and time. These are both valuable for businesses, in particular for small businesses, which is why it is recommended to constantly educate yourself on the law. You could do this by reading the news or even reading blogs on finances.
Why Payroll?
Payroll costs will rise in line with your company’s growth. It’s critical to figure out what your budget will be in advance. As a business owner, you must match the Medicare and Social Security payments made from your employees’ paychecks. You may also be required to pay various employment taxes depending on where your company operates. In addition to fixed costs, variable costs such as commissions and benefits that may be associated with your payroll, as well as time and attendance software, must be considered. Make an attempt to keep your spending as low as possible by sitting down with your accountant to calculate your budget.
The tips in this article are just a portion of all the information available on how to manage your small business payroll. It is definitely advised to get in touch with the IRS for more information or visit other websites online!