In small and large businesses alike, payroll plays an important role. With its help, employers can calculate taxes, manage employees, collect payment and distribute payments on time to all individuals in the company. In payroll management, a payroll keeps track of all employees of a certain business who should be receiving various work-related benefits and payments each month. All these activities are carried out by payroll department in most of the companies around the world.
This department handles the processing of paychecks of employees who are paid and not paid within a given time period. Payrolls are generally submitted to companies’ payroll departments once every quarter or yearly. All transactions made by employees, such as receiving, depositing, deducting, and paying wages are processed through payroll department. The transactions include deductions and credits as well. The processing of payroll requires a huge amount of paperwork.
For most small businesses, the use of payroll is strongly encouraged due to the time-consuming process it requires. Small-scale and medium-scale businesses alike find it difficult to maintain manual payroll systems. This is because most of these business owners cannot afford to hire employees with comprehensive knowledge of payroll policies, payroll management and mathematical data processing. Most small businesses choose to apply for government’s social security programs. This provides them with simplified payroll processing options. The applications do not however ensure smooth payroll processing.
Large-scale and medium-scale businesses however find it more efficient to implement complete accounting software solutions which provide complete payroll processing features. These systems also integrate seamlessly with customer and accounting systems making it easier for businesses to obtain needed information within a short period of time. These solutions make implementing payroll processing fast and easy for businesses. However, applying this solution also has its own sets of challenges.
One major challenge small-businesses have to face is the tedious task of documenting all the employee inputs accurately. All salary paid, bonus credited, taxes deducted form payroll are necessary records which must be documented properly. In addition to this, it is essential to retain accurate details of all the employee inputs especially the latest salary received by each employee. It is advisable to keep an updated list of all employee inputs in an easily accessible spreadsheet.
Another challenge small-businesses face is how to handle the payroll details generated by the software without potentially affecting the accuracy of the data. This is where spreadsheets come in handy. It is possible to maintain the database of employees’ salaries, tax deductibles, bank account details and other employee related information in spreadsheets. All these records can be easily accessed anytime and altered as and when required. This approach allows you to save a lot of time compared to manually maintaining all the records.