How to Set up a Payroll System
If you are looking forward to enjoying the benefits of running a business, you must equally be ready for the daunting and stressful responsibilities like processing payroll every now and then. From being time-consuming to expensive, there are plenty of reasons why processing payroll is the worst experience for these entrepreneurs. Fortunately, there is a way you can set up your payroll system so you don’t feel stressed and overwhelmed every time you have to process it. For more on how to set up an efficient payroll system, read more here.
Setting up a payroll system begins with collecting all the necessary paperwork needed to put a sophisticated system together; getting the Employee Identification Number from the IRS immediately you recruit a team of experts is the first step. Apart from the documents you get from the revenue authorities, you have to get the forms filled by your employees and collect timesheets if you are paying them by the hour.
Once you have the documents, choosing a pay period structure is the next step; since most employees are known to live paycheck to paycheck, setting up a suitable pay period structure that ensures cash flow throughout can go a long way in retaining them. An ideal pay period structure should work for both the employer and the employees; for instance, a bi-weekly pay period structure ensures your employees still have cash throughput the week while saving you the weekly hassle of processing payroll.
Finding a suitable payroll system is the next step; to save the time and stress that comes with processing payroll, you should consider using a payroll system by choosing from the ones available. Payroll systems help are meant to help in the calculation of federal and state withholdings and generate pay stubs but since you have already chosen the right one, this should be easy. During the processing of payroll, you should stop to check and ensure the whole process is error-free to avoid problems with the IRS, after which you can distribute the paychecks and stubs to your employees.
Setting up a payroll system that works for your business includes paying payroll taxes monthly, making it the final step in the process but very important especially if you want to avoid problems with the IRS. Setting a payroll system can save you the trouble and stress you experience every time you have to your employees; it does not have to be intimidating and overwhelming anymore. As you can see, setting up an efficient and reliable payroll system is very easy; you only need to follow these guidelines.