One of the smartest things a new business owner can do to get off to a good start is to utilize a payroll management system.  This article will explore three key aspects of payroll management, highlighting best practices that can help you streamline your payroll processes. Additionally, it will discuss how these practices can contribute to your success in employee satisfaction, fulfilling your tax obligations, and sustaining the financial health of your small business.

1. Choosing the Right Automated Payroll System for Your Business

Selecting the appropriate automated payroll system is crucial for your small business. There are several regional and national companies that offer a wide range of services and products, and you should review your options, discuss them with financial professionals, and make an informed decision. Be sure to choose a system that aligns with your specific payroll needs, considering several factors such as cost, scalability, automation capabilities, and integration with other services or treasury management solutions. Whichever system you choose, you want to be confident that the solution can communicate your company’s financial health at a glance, help you comply with your tax responsibilities, and provide a reliable system for capturing your employees’ compensation.

2. Ensuring Compliance

Running afoul of payroll regulations and tax requirements may lead to fines and other legal issues, so it's important to be up to date on local labor laws, tax regulations, and reporting obligations. To make sure you stay aware of tax reporting mandates, it’s a good idea to establish open and frequent communication with an accountant and a business attorney. Your banker may be able to recommend several legal and financial professionals who are qualified to provide guidance in managing this area of your small business’s tax and payroll duties.

3. Facilitating Direct Deposit and Self-Service

Adopting a payroll system that allows for direct deposit offers numerous benefits for your small business and your employees. Many employees in today’s job market assume that direct deposit is a given, and for good reason. For employees, direct deposit benefits include having faster, more secure, and more convenient access to their money than they would if they had to keep track of paper checks. Many direct deposit solutions come with self-service portals or mobile applications that enable employees to access their pay stubs, tax documents, and other payroll-related information conveniently and independently.

For employers, direct deposit may save costs by eliminating the need to print and process paper checks. Offering direct deposit may also decrease the risk of fraud from stolen paper checks and allows more flexibility to pay employees regardless of their physical location.

Streamlined payroll management is a critical component of your small business's financial stability and employee satisfaction. To create a strong foundation for success, select a payroll system with your specific business needs in mind, consult with an attorney to understand compliance requirements, and encourage the use of direct deposit and employee self-service options within your payroll solution. For more information about how complete payroll as a best practice contributes to the efficiency of your business, please reach out to a Cambridge Savings Bank business banker today.