Payroll management is the system by which employers compensate their employees monetarily for work done. Furthermore, businesses need to show their dedication to employees, follow government regulations and maintain organization among financial records.
To keep your business running smoothly, it’s important to have an efficient payroll system that is easy to use. Having the right payroll management, employers can achieve a sense of relief and more time to focus on developing their business. Thus, this article will explain why payroll management is important and how you can optimize the process.
What you’ll learn:
1. Why do you need to optimize payroll management?
2. How to optimize your payroll management?
2.1 Plan for comprehensive procedures and policies
2.2 Ensure compliance with local rules and regulations
2.4 Employ professional organizations with local expertise
Why do you need to optimize payroll management?
Payroll management is process-oriented and detail-heavy, handling things like payroll transactions and time control systems while always being aware of potential changes (new hires, resignations) — all the while following local laws. Although, the majority of remote teams are situated in distinct time zones and countries. This makes payroll complicated when it comes to taxes, labor rules, social security laws, and payment methods and currencies. To stay compliant with ever-changing local regulations, it is critical that companies revisit and optimize their payroll management process on a regular basis. If you don’t comply, you may be subject to penalties.
In addition, payroll management also has an effect on employee retention. According to studies, if an employer frequently pays their employees late or with the wrong amount, 43% of those workers would leave.
How to optimize your remote payroll management?
1. Plan for comprehensive procedures and policies
Because managing payroll remotely can be complicated, having written procedures and policies will help you prevent errors and ensure compliance as your company grows.
These procedures and policies must detail how you plan to:
- Get and confirm your employees’ data
- Keep important documents like contracts, tax forms, and pay slips organized and accessible
- Determine the frequency of making payments and the number of payments every year
- Track time and attendance
- Adapt your company’s currency according to every employee’s geographical location.
- Choose a payment method (direct deposit, transfer, pay cards, or checks)
2. Ensure compliance with local rules and regulations
Without exception, it is critical to compliantly categorize and pay employees (contractors or full-time) to sidestep any potential legal issues that could arise from errors or misconceptions. Contractors are only paid for specific projects, have a set price, and receive no additional benefits. Full-time employees are paid a wage, their employers cover their taxes and social security, and they’re eligible for benefits and paid time off.
Payroll compliance differs depending on the country and state. With different rules, regulations, and requirements in each area, it can be tough to keep up. Avoid costly penalties and legal action by ensuring your business is up-to-date on how to set up payroll in every location you hire for. Check local laws often for changes that might affect payroll, so you can avoid penalties for non-compliance.
3. Use cloud-based tools
Cloud-based tools like Xero are slowly taking over different aspects of remote work, and payroll management is one area that has been significantly impacted. Through simplifying and hastening payroll setup and management, automated payroll systems help teams to enhance efficiency and upgrade productivity.
Xero’s Payroll Admin feature guarantees that only those with the proper permission can use its payroll features and view employees’ sensitive data. In addition to being easy to use, Xero also offers a number of helpful add-ons, like tax calculation and leave deductions.
4. Employ professional organizations with local expertise
Although a payroll automation platform facilitates the process, local expertise is critical to managing payroll. With the changing landscape of work, it is now more important than ever for companies to correctly pay their employees in compliance with local laws and on time. This is where FastLane can help. Our locally based HR experts will aid you in following changing domestic laws and regulations. With our experienced specialists, you will feel confident about knowing your payroll is being managed correctly.
How can FastLane help?
FastLane offers payroll services to assist our clients by utilizing online payroll tools to automate HR and payroll-related tasks. We automate and handle various aspects of the traditional payroll and HR process by moving our clients’ tedious payroll and administrative work to an online platform. This would improve the payroll process which makes it easier and more efficient to get your employees paid, lowering expenses and allowing you to focus on the key business activities that make your business profitable. Get started and contact us today!