LUTZ BUSINESS INSIGHTS
how automating your payroll will change your life
mike perry, client accounting services director
You didn’t start a business to learn about compliance with federal and state employee compensation rules. Yet here you are, wearing out your calculator twice a month as you try to stay current with tax tables, government regulations, and worker benefits. One small mistake, and you’re paying penalties, making employees and a whole lot of agencies, or benefits providers unhappy.
Isn’t your time better spent managing your business and planning for its growth? Automating payroll will give you those hours back and reduce the possibility of costly errors exponentially. There are countless websites that provide these services. They can help you:
Maintain comprehensive employee profiles
How do you store and retrieve your employee information now? On time cards, in folders or Microsoft Word files? However you do so, it can be cumbersome just looking up details. Payroll websites let you create online records for each employee that contain everything you need to know, including:
- Contact information
- Required tax form data from the W-4 and W-9
- Direct deposit authorization
Set up multiple pay schedules
Do you pay some employees weekly and others semi-monthly, for example? Payroll websites accommodate such an arrangement. They also allow off-cycle payroll runs.
Define multiple earnings types
You might pay some workers by the hour while others get an annual salary, but payroll websites go well beyond these classifications. They can support bonuses, commissions, etc., and even let you set up custom earnings types. You can also automate withholding, like garnishments.
Calculate state, federal, and local payroll taxes
This step is probably the bane of your existence if you’re processing your company’s payroll manually. The online solutions available not only calculate payroll tax withholding, but most of them actually submit those taxes and any filings necessary by the prescribed deadlines.
Add deductions for pre-tax benefits
If you offer your employees benefits like health insurance and retirement plans, calculating and incorporating those payments and any matching contributions you make can also be quite the challenge. Payroll websites automate this step.
Track sick and vacation time
Once you define your PTO policies, you will always know when an employee is eligible to take time off.
Prepare W-2s in January
Using the data they’ve collected through the year, most payroll websites take this task off of your to-do list, too.
Set up all of this
These online applications usually offer step-by-step tools to setup and get ready to run payroll. Company onboarding specialists are also always available to help.
Actual payroll processing generally only takes a few minutes. If your payroll is often the same, you may be able to put it on autopilot.
If you’re already doing your payroll manually, you should be able to make the transition to online fairly easily. But if you’re struggling with or new to employee compensation, we can help you get up and running, or even take over this element of your accounting completely. Contact us, and we can discuss your options.
ABOUT THE AUTHOR
MIKE PERRY + CLIENT ACCOUNTING SERVICES DIRECTOR
Mike Perry is a Client Accounting Services Director at Lutz with over 15 years of accounting experience. He focuses on providing business consulting, software implementation and training, accounting procedure assistance and outsourced accounting replacement consulting for closely held companies.
AREAS OF FOCUS
AFFILIATIONS AND CREDENTIALS
- American Institute of Certified Public Accountants, Member
- Nebraska Society of Certified Public Accountants, Member
- Intuit Certified ProAdvisor, QuickBooks Advanced
- Certified Public Accountant
- BSBA in Accounting, University of Nebraska, Kearney, NE
- Community Bike Project Omaha, Past Treasurer
- How to Reconcile Your Accounts in QuickBooks
- Starting a Business in 2020? Your Accounting Options
- How Automating Your Payroll Will Change Your Life
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- Cash Flow Problems? 5 Ways to Improve It
- QuickBooks + CRM = Better Customer Relationships
- Does Your Business Need a Merchant Accountant?
- 5 Money Management Tips You Need
- 12 Financial Reports You Should Be Creating
- Don't Click That Link! How to Avoid Phishing Scams
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