6 WAYS TO MANAGE YOUR SMALL BUSINESS’ PAYROLL

Are you very concerned about the hassle that surrounds the preparation of the payroll of your small business? Even for small businesses, the preparation of the payroll is not an easy task. This could partly be attributed to the possibility of errors or payroll legislative issues. However, the payroll of your small business could be adequately managed by following the suggestions below:

  • Keep adequate information for tax time:

It is quite important that all receipts and invoices be properly filed and kept away in a safe place in preparation for tax time. However, most small business owners do not follow this, as they do not keep the receipts and invoices in an organized manner, therefore, they find out that they have lost some of such important documents by the time they sit to file year-end taxes or quarterly taxes. The consequence of such unorganized management of paperwork is payment of taxes much more than the amount that should be paid. It hits the wallet of such business owners hard! Therefore, become organized in keeping important document.

  • Assess the financial status of your business

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Critically assess the financial state of your business. This is to ensure that your business is thriving and able to support the payroll generated for your small business. This is quite important, as a good knowledge of the financial state of your small business would tell whether your small business is under-staffed or overstaffed. If the income of your small business in correlation to the number of employees to be paid is so small, you could consider reducing your workforce and as such pay a reduced number of employees, to yield similar or better results.

  • Use software or cloud technology

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To reduce the significant amount of time and stress it takes to prepare the payroll for your small business, it is advised that you engage the use of a payroll software. Using a payroll software or cloud technology prevents inadvertent errors from occurring in the payroll of your small business. Therefore, for increased efficiency, accuracy and time-saving in the preparation of the payroll of your small business, engage a software or use cloud technology.

  • Manage your payroll on the go

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To make the preparation of your payroll always on time, it is advised that your mobile device(s) be employed in the financial activities of your small business. Rather than just chatting all day, you could keep tab of the financial state of your small business by recording the progress made day after day on your mobile device(s). With such useful information about the financial state of your business on your mobile device, you would find it easy to prepare the payroll for your small business, while avoiding errors and delays.

  • Avoid mixing personal finance with business finance

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If you mix your personal finances with your small business’ finances, you run a risk of not knowing the actual financial state of your small business, which would lead to poor decision making in the long run. You also run the risk of mistaking your cash flow (which is the excess cash revenues over cash outlays in a given period of time) for profit.

  • Adequately classify your employees

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It is quite important that all your employees are adequately classified, to ensure that the proper payroll is prepared. Improper classification of employees could lead to tax overpayment, penalization from the tax office or under payment of employees, which are all not in the best interest of your small business.

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