The work that goes into the preparation of the payroll can be so much that a small business might find itself severely challenged in that department. It can take a lot of time and organize to do it. Payroll is also something that needs to be ready by a certain date in the month, if the employees are to get paid, which is their right anyway. You, therefore, need to put certain things in place to ensure this is something that happens right as scheduled.
You need to get the business’ tax ID. The process of incorporating the business usually brings with it an employer identification number. One that did not go through this process will need you to make plans for it.
You may also think of switching to salaries. Salaries present lesser work than hourly wages do. It entails less work than the burden of having to count working hours for each employee.
You then need to open a payroll account, separate from other business accounts. This will ensure accuracy in your calculations and allocation of funds, as well as timely payments. It also helps in auditing, since everything is organized and well documented.
You also need to ensure you pay your taxes on time. Payroll taxes tend to get overlooked, which usually results in a huge penalty when it is discovered. You, therefore, need to pay them on time and get receipts for those transactions. This shall be proof of payments you may need in future cases.
You can arrange for a pay stub generator. This is a tool that makes the tracking of payrolls much easier for an employer. It also automatically generates the payrolls for each employee. They can then get and store these records in either soft or hard copy. They shall be proof that payments had already been made.
You can give your employees tax-free benefits. People tend to think that a small business is not in a position to give such incentives. But they can be made affordable when you exercise them during a pay review period. This is how you do not mess up a running payroll system. It shall also emerge as the quickest and most cost-effective method. Your employees will like to have such benefits.
Outsourcing is also an option. This applies for those businesses that are so busy they cannot find time to do this, but can afford to spare some funds for it. You will also save a lot when you avoid having someone doing it permanently. You will have it professionally done, and not worry about the extra payments.