Payroll processing is one of the most time-consuming tasks that HR professionals and managers have to deal with on a day-to-day basis.
It’s also one of the most important, so there are many steps that need to be taken in order to ensure everything goes smoothly and errors are kept to a minimum.
This list of 10 things HR managers need to do to ensure efficient payroll processing will help you streamline the process and make sure your staff gets paid on time and correctly every month.
1) Know your state laws and regulations
Every state has specific laws and regulations that govern how employers can manage their workforce.
With all of these rules, it’s important for HR managers to understand their state’s labor laws inside and out. This is particularly true if you work in a federally regulated industry (banks, insurance companies), which will also have federal requirements you must follow.
If you aren’t sure what your state requires, reach out to your local Department of Labor office or legal counsel for more information.
2) Get tax forms in on time
Even if it’s only a few days late, tax forms that arrive past their due date can cause problems for employees and employers alike. Getting them in on time will not only ensure your employees get their money when they should, but it can also keep you from facing penalties and hefty interest charges.
Remember: If it’s over 30 days late, you could be looking at penalties up to 25% of what’s owed—with interest rates upwards of 20%.
3) Have a system for employee hours, absence, etc.
Ensuring that you have a system in place for recording hours, absences, and other personnel-related metrics is crucial for maintaining efficiency during your payroll process.
Since there are so many moving parts involved with getting your employees paid each week, it’s important to set up reminders and checklists that will help keep everyone on track.
For example, if your company doesn’t require employees to enter their own hours into a system outside of payroll (we know they shouldn’t be doing that anyway), but if they do, creating a checklist of all tasks needed will ensure these items get taken care of in a timely manner.
If anything is overlooked or missed, you can quickly remedy any issues before they affect your ability to pay employees at every pay cycle.
4) Use the right technology
Technology can help HR departments keep up with a company’s payroll processes. Software providers offer systems for issuing employee paychecks, calculating and filing taxes, tracking vacation days and other benefits, maintaining worker records, and dealing with sick leave.
Some of these software programs are web-based, so they can be accessed from anywhere with Internet access. Some come as hosted solutions that are managed by a vendor or on-premises applications that an organization installs on its own servers.
Other options include software programs specifically designed for mobile devices like smartphones and tablets.
Payroll management software can be paid for as one-time fees or through monthly subscriptions – depending on an organization’s needs, preferences, and budget limitations.
5) Communicate with employees often
It’s important for employees to know that HR is paying attention and caring about their issues. It may be helpful to hold a question-and-answer session for employees once or twice a year so that they can share any concerns or ideas.
Make sure you get back to each employee with an answer within a few days. If you don’t have time to respond personally, make sure someone in your department does. And when you do respond, follow up with an email thanking them for taking time out of their day to talk with you.
These simple steps will help foster trust between your department and employees
6) Stay organized by designating a single employee as an administrative contact
Although it may be tempting for your human resources staff to take on additional responsibilities—say, if someone new is hired, or there’s a particular project that requires extra attention—it’s important for you to designate one employee as an administrative contact.
This way, you can avoid overloading any single employee and prevent confusion from rearing its ugly head down the road.
7) Collect all necessary information from employees and vendors
When a business hires new employees, they must collect information about their employees and pay them. This includes but is not limited to social security numbers, addresses, and other necessary information. Employees also have specific documents that are needed from them such as W-4 forms or proof of income.
These two groups of people are what most employers think about when it comes to paperwork that is part of payroll processing.
This is just a small part of all that has to be done because there are many more factors such as withholding tax forms, vendors being paid, etc…
Before one can understand how important it is for an HR manager to handle all aspects of payroll correctly you must know exactly what happens in a normal employment setting so that one can make an informed decision.
8) Don’t fall behind on mandatory reporting
In order to avoid penalties and fines, make sure your company is filing all required reports with state and federal agencies. These are due on specific dates throughout each month, so it’s crucial that you check your calendar—and file those reports—in a timely manner.
If you don’t have time to do them yourself, consider outsourcing them
9) Provide real-time access for managers
One of your first tasks should be giving your managers instant access to their team members’ time and attendance, travel logs, expense reports, etc.
Whether it’s from a mobile device or from a laptop during their weekly one-on-one meetings, you want them to be able to check data about their employees quickly and easily.
This improves accountability for everyone on staff by encouraging better tracking and reporting for management. It also makes approving timesheets faster and easier than ever before.
If you want your company’s employees to work well with new tools, give them access as soon as possible. That way they’ll get used to using them as part of their daily routine instead of feeling frustrated with having new tech forced upon them
10) Track it all through software
Startups typically have a lot of balls in motion at any given time, and tracking all those moving parts can get messy.
The best way to keep tabs on it all is through software, whether that’s simple spreadsheets or even something as complex as enterprise resource planning (ERP) software. You don’t want to get too carried away when you first start out, and you should definitely avoid writing your own complicated application if possible, but keeping track of everything with something digital makes payroll easier and more precise.
Plus, once you reach a certain scale and hire an actual human resources manager, they’ll appreciate having your data neatly organized in a database.