When you’re doing your own payroll, the potential to make mistakes is a very real possibility. There are a lot of things that can go wrong, and this is why some companies look to outsource the task. But, that’s a costly process, and you shouldn’t need to do that. Instead, we’re going to help you with your in-house accounting by making you aware of a few mistakes that must be avoided. Ready? Let’s begin.
You wouldn’t dream of missing deadlines when it comes to your own personal taxes, and you can’t afford to do the same here. Payroll deadlines should be marked clearly on your calendar, and you must report and deposit them by the specified date. Failing to do this could result in substantial financial penalties and a damaged reputation. It might seem like a simple task to get right, but in the midst of busy business operations, it can easily fall by the wayside.
A miscalculation of any kind in relation to payroll can cause huge problems later on. Tax codes are difficult to get your head around. Surprises on timesheets can be misread and calculated incorrectly. Any little error might just put a huge wrench in the financial system, potentially getting you in a lot of trouble. The best way to get around this is to avoid manual processes. Software like QuickBooks is great, and optional extras like QuickBooks checks envelopes can help too.
Poor Record Keeping
A company that struggles with poor record keeping might just find itself sinking in stature before long. As a business, you’re required to keep all sorts of records across different areas of the business. Payroll is no different, and if you can’t produce things like time sheets and past payment proof, you could end up in difficulty. So, if you think you need to hang on to something for later, it’s better to be safe than sorry.
Losing Employee Trust
Payroll peril is about more than the suffering of your company’s finances. It also relates to how your employees react, and you better believe they’ll lose trust if you can’t get payroll right. They expect this to be dealt with efficiently and professionally, and doubts will arise if you can’t produce the goods. Before long, you might just lose your best workers to the competition because of an inadequate accounting system.
When it all goes horribly wrong, you might decide to try and defend any incurred penalties by claiming ignorance. But, stating that you “didn’t know” about certain rules and regulations will get you nowhere. It’s your job to understand the law and how it works. If you can’t do that, you’ll not only suffer from financial penalties but a loss in reputation as a business owner. And, crucially, an ignorance plea will be thrown far out the window.
So, if you’re serious about taking on payroll duties in-house, you need to make sure you get them under control. As long as you can do that, you’ll be all set.by