Whether you’re just starting out in business or your company is in the early stages of growth, maintaining payroll is an essential business activity that should be undertaken with care, accuracy and consistency.

That’s not always easy if you don’t know how to crunch the numbers, or if you don’t use an outsourced payroll service. If you handle payroll, here are some tips to help keep costs down and productivity up:

1. Know what you don’t know. If you’re not a CPA and if you didn’t major in Bookkeeping in school, chances are you don’t know what you don’t know. In this case, hire a CPA, accountant or some other payroll professional to get your books in order and your payroll system in place.  These professionals know the rules and they know what you need to know. They have something worth paying for – information, knowledge and experience.

Don’t let a one-time consulting fee stand between you and accurate, reliable, simplified payroll functions. It may cost you to have a consultant clean up the books and create a system that you understand, but it’ll save time and keep the business in compliance.  It’s a good idea to work with the same consultant over time as your business grows and your payroll expands, so keep that money pro’s telephone number on your speed dial for quick access to questions.

2. Set up a payroll system. If you use an accountant, arrange for some face time to work out a system using payroll software like QuickBooks®, Peachtree® and other tools to streamline payroll management.  Keeping accurate records isn’t difficult, but it must be done properly to keep taxing agencies and employees happy.  The goal should be to keep payroll chores from swamping your days – time you could spend growing your business.

If you’re processing your own payroll, your bank can provide valuable resources to make things go more smoothly.  For example, Nevada State Bank® offers direct deposit for employees’ paychecks and the ability to use the ACH system to make payroll tax payments.  You may also want to set up a separate bank account specifically for payroll.  Ask a representative at any Business Center for details.

3. Keep complete payroll records. Obviously, you’ll need the basic information from every employee on the payroll, including Social Security number, W-4, benefits, overtime, bonuses and other factors that factor into keeping the books.

Create a single file using MS Excel® or some other spreadsheet to track who gets paid what. Keep your payroll file up-to-date. Ask employees to notify you of changes to their personal circumstances well in advance of when changes take effect. The more lead time you have to update records, the easier it will be.

4. Know the rules and play by them. The IRS, state and local taxing agencies are happy to provide information on what they require by law. Contact these agencies for guidelines and adhere to those guidelines to avoid paying too much or too little too late.

Consider taxing agencies as advisors to your business. They’ll help you understand their rules and regulations. Some even offer workshops for small business owners. If you have the opportunity to attend a workshop on state taxes, attend the workshop, take notes, ask questions and get a single point of contact you can call when questions come up.

5. Know your deadlines.  Ask the Nevada Department of Taxation for a list of forms and due dates to stay current on obligations such as payroll taxes and unemployment taxes.  They can be reached on the Web at https://tax.state.nv.us.  For information about filing federal forms, such as W-2s and 1099s, visit the Internal Revenue Services website at www.irs.gov.  To avoid late fees and penalties, calendar those deadlines and make sure you have enough time to complete the paperwork in advance.

6. Keep up with payroll system functions. There’s a lot more to preparing payroll than counting up hours worked by staff. If you offer benefits (healthcare insurance, for example) employees may pay a small portion of healthcare costs. Add to this 401(k) plans, wage garnishments and other factors, and it’s easy to see you may need a system that’s expandable to guide you through the maze of who gets what and when.

Most payroll software is designed for the uninitiated, providing guidelines, alerts, warnings and other alarms that tell you to recheck the figures if something doesn’t add up.

7. Evolve your payroll system as your company grows. If you have a couple of partners and a few employees, payroll is fairly simple. But your plan may be to grow your business by adding more employees and expanding operations.

At some point in your business’ growth, it may be time to consider outsourcing payroll functions. This eliminates the need for staff to prepare checks, make timely deposits to tax accounts and keep healthcare premiums paid.  Chances are, the system you start with won’t provide the functionality required as your business grows and new hires are added to the payroll.

Good news! Nevada State Bank and Paychex® now offer two options to simplify payroll processing for any size business*:  Full-Service Payroll, which does all the work for you, and Business Online Payroll, with self-service online processing.  Learn more online at www.nsbank.com/payroll or call 866-950-2734.

8. Fix problems fast (like yesterday). If you underpay taxes for your employees, every day that passes can cost your business money in interest and penalties. When you’re notified by the IRS, the state tax commissioner or local taxing agency that money is due, don’t put off fixing the problem. It’s only going to cost you more in the end.

Don’t let payroll management eat up more time than necessary. You have a business to run, and payroll shouldn’t be the most time-consuming activity you undertake each day.  You can keep payroll under control and still have time to add value to your business. Just use the resources available to you and don’t hesitate to ask for help.

 

*Nevada State Bank is not affiliated with Paychex and does not provide, warrant or guarantee the Paychex products and services.

The information contained herein may not represent the views and opinions of Nevada State Bank or its affiliates.  It is presented for general informational purposes only and does not constitute tax, legal or business advice.