Payroll is one administrative task which small businesses have to do but are not overly excited to carry out. This is because of the many challenges that come with which are both time-consuming and energy-sapping.
Below are some small business payroll challenges:
1. Compliance Challenges
Payroll compliance is a major challenge faced by small businesses. They have to deal with the constantly-changing federal, state and local laws. The worrying part that is that penalties await them each time they default with any of the laws.
For instance, failure to inform the government of new hires is a punishable offense. They also have to ensure that the deductions they make from their employees’ paychecks are accurate. All these and many more can make payroll processing a big challenge for small businesses.
2. Employee Absence and Tracking
Manually tracking the time of employees can be so challenging. Your business will be vulnerable to making so many mistakes as tracking employee work time, absence, time-off, sick time among others is not an easy task.
Errors can be reduced when technology is leveraged based on its ability to track employees’ time more efficiently. It is also important to track overtime especially with the IRS being serious about the Affordable Care ACT. Good tracking of employee time also ensures that the right salary is paid so that legal issues do not come up between employer and employee.
3. Timely Processing of Payroll
With owners of small businesses wearing so many hats at once, it is difficult to keep track of payroll processing in a timely manner. Despite this challenge, it is important to process payroll promptly since it ensures that paychecks are accurate and that accurate records are maintained.
It also helps small businesses maintain compliance with the payroll rules and regulations of the Internal Revenue Service. Optimizing the payroll process helps to ensure that small businesses escape the costly fines and penalties given by the government.
With so much to learn about avoiding the stiff fines and penalties of the IRS, small businesses are beginning to hire the services of Payroll Service Providers. Outsourcing offers small businesses escape from the many mistakes associated with payroll processing.
It also frees up their time so that they focus it on growing their businesses. Since most of these national payroll services offer guarantees against fines and penalties, it becomes one less worry for small business owners.