We all like to get paid. Your employees are no exception. And as Cuba Gooding Jr. put it, they will want you to "show them the money." When and how you do that, however, can be tricky. Payroll for small businesses can be challenging. So we have put together some tips to get you started or improve your payroll.
Establish a Payroll Budget
When your agency grows, so do your payroll expenses. We have previously discussed how outsourcing and COVU can help your growing agency manage costs. However, if you decide to do it yourself, deploying a comprehensive payroll budget is vital. Taxes, Medicare expenses, and fixed and variable fees will quickly overwhelm you if you aren't careful. Sitting down and writing a budget for your business will keep you on track and help you avoid payroll pitfalls. It would help if you also went over any budgets with your accountant. A financial professional may be able to spot discrepancies you can't.
Don't Forget About Account Payables & Receivables
While it is vital for your business, payroll is far from the only expense your agency will have. The constant cash flow, both in and out of your business, can get overwhelming, and it is easy to spend too much. In fact, 60% of new companies go under because of mismanaged cash flow. With this in mind, your agency should keep a constant eye on its accounts and make sure you plan for payroll. Don't overextend your credit, and keep up to date with payments. You should also make sure your payroll is what you work on first. Because without paid people, you won't have a business.
Choose Your Business' Payroll Schedule Wisely
When it comes to actually paying your employees, you only have a couple of options. The general payment structure is either bi-weekly, bi-monthly, or once a month. Generally, your payment schedule will depend on the size of your company. A good rule is that the more employees you have, your payroll schedule should be less frequent.
Decide Carefully Between Salaries & Hourly Pay
When hiring new employees, you will be faced with whom to keep on various forms of payment—namely, salary or hourly. Generally, paying your staff a salaried wage is simpler. However, it may not make sense for some positions in your agency. Roles like a sales agent or HR make sense to have as salaried positions, but jobs like front desk clerk or assistant may make sense to keep as hourly. Especially since hourly pay gives more flexibility to workers. There are also lots of software solutions that integrate payroll and clock-in recordings.
Integrate With Your Scheduling & Accounting System
Speaking of integration. Another place it makes sense is your accounting systems integrating with your scheduling software. Accounting software can automatically push worked hours into your accounting system for payroll. Meaning once it's up and running, you need very little work to keep it operational. This investment will make your payroll faster and more efficient.
Paying your employees on time has the added benefit of increasing trust and showing them you are someone they can rely on. Meaning you'll keep more talent and
Paying your employees on time has the added benefit of increasing trust and showing them you are someone they can rely on. Meaning you'll keep more talent and
Overall your business will need to pay its employees. That isn't negotiable. But what is negotiable is the way you go about it. Whether that is through scheduling, accounting, or hourly vs. salaried employees. Your agency has many ways of showing its employees the money.
