Home Others How To Improve Your Business’s Payroll Process

How To Improve Your Business’s Payroll Process


When you’re running a business, there are many things you need to look out for: retaining employees, keeping customers happy, increasing profits, and more. Another crucial thing you must consider is payroll processing; paying your employees and maintaining financial documents for your business. If you outsource, Payroll service costs can begin from $39 per month, but the price can increase based on the company size and the support you want. 

You must manage your payroll correctly because it is your legal requirement; otherwise, you must pay fines or penalties. It helps retain employees by paying them accurately and on time, which helps boost their performance. Let’s thoroughly examine payroll processing and how you can improve it. 

What Is Payroll Processing?

Payroll processing entails dispatching all employee salaries in a timely and efficient manner. You have to properly track, calculate, and distribute their payments while determining the right amount of money to withhold for taxes or the company benefits. HR and Finance departments typically handle payroll processing, but you can outsource or use a software platform to automate the process. 

In the process, you determine tax codes and the company’s EIN or employer’s identification number given by the government to track payroll taxes. You can set your EIN on the IRS website. Gather your employee’s tax information; full-time employees may fill out form I-9 and establish a payroll schedule to determine payment schedule: it can be weekly, biweekly, or monthly. 

Next, select how you will pay your employees, whether it’s through direct deposit, paper check, or payroll card. Develop a payroll policy that considers employees who are or aren’t eligible for overtime, time off, mandatory and voluntary payroll deductions, and more. Keeping that in mind, you can calculate each employee’s gross pay (total pay before deductions or taxes), then calculate employee deductions referencing their tax information and state requirements for tax withholdings. Other employee deductions include 401(k) investments or social security. Finally, calculate employee net pay. 

How to Improve Payroll Processing

Now that we know the basics of payroll processing let us look at a few ways you can improve the process and make it more efficient. 

1. Use Time Clock Software.

Regardless of your company size, You can use time clock software solutions to keep track of your employee’s attendance and work time, which aids payroll processing. As it is automated, it can reduce human errors that occur when manually putting in information, making payroll processing more accurate. Such applications help you keep track of overtime, sick time, paid time off, and more.

It’s also an unfortunate fact that not every employee is honest with their work. Almost 43% of all employees commit time theft, such as through buddy punching (their colleagues clock in or out for them when they aren’t on the job, and a time clock can hold them accountable. 

To choose the right time clock software, look at the features available, such as time tracking, data analysis, billing and invoicing, and more. They should offer extensive or customizable reports to help you understand the data, and they should be able to manage how you pay your employees over time, if it can handle accruals and employee time offs. Finally, consider your budget, value for money, and if the software is easy to use.  

2. Clearer Payroll Policies.

Payroll errors happen when your employees don’t understand the payroll policies or system because of limited access or lack of training. It should include:

  • How your payroll process works
  • Employee information
  • How salaries are set and calculated
  • How you calculate Promotions, benefits, and deductions. 
  • Employee reporting requirements
  • How will you comply with applicable laws and regulations
  • Payment structure

Put it in writing and disseminate it to all your employees, and encourage them to ask questions if they’re confused so no future problems arise. 


Payroll processing is a vital part of your business, whether it’s small scale or large, you should ensure that you are carrying out the method accurately and efficiently. You can create clear and comprehensive payroll policies and invest in time clock software to improve the process. 


Previous articleThe Issue Of Rising Pay For Attorneys And What May Be Driving The Salary Increases
Next articleScheduling Flexibility: A Major Perk Of Mobile Auto Repair


Please enter your comment!
Please enter your name here