The idea of being an entrepreneur is widely romanticized, but the reality involves a lot of long hours and hard work getting to grips with the more complex aspects of building a business from scratch. Many budding company owners make payroll mistakes early on in their careers which can cause everything from employee disgruntlement to regulatory penalties.
To help you avoid these setbacks, here is a look at the most common examples made by ambitious entrepreneurs.
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If the information you use as the basis for your payroll management is inaccurate or poorly organized, then all sorts of other problems can blossom from this sorry state of affairs.
It is therefore vital that you aim to stay on top of your record-keeping responsibilities from day one, and using a service like FormPros to create your paystubs can help in this respect, allowing you to automate the creation and storage of many important pieces of payroll-related paperwork.
Also worth noting is the fact that a cleverly orchestrated approach to record keeping will let you provide workers with the documents they need, such as pay stubs. Whether you do this physically or electronically is up to you.
If you treat full time employees in the same way as contractors and freelancers you work with when dealing with the payroll, you will be making one of the most widespread payroll mistakes in the enterprise space.
There are key differences in the way that permanent members of staff and those who are not employed on a full time basis are treated in terms of taxation and benefits. Stick to the letter of the law to avoid being penalized.
Entrepreneurs will often find that cash flow is the biggest obstacle to achieving their goals, and this is certainly worth being aware of in a payroll context. Setting a schedule for paying employees and contractors that works for you, then making sure you stick to it, should let you sidestep serious issues.
For example, in some cases a weekly payment schedule may make sense, while for other organizations the increased flexibility of paying monthly could be a better fit.
You also need to take into account the need to schedule in tax payments and stick to them, or else the IRS could charge you a percentage of the tax owed if a deadline is missed.
Feeding into the aforementioned importance of good record keeping practices, it is also necessary to invest in adequate resources to ensure that you can still keep the payroll ticking over even if there is some failure of hardware or software on-site.
To avoid computer glitch payroll mistakes, many modern firms look to the cloud to provide them with this means of ensuring continuity should some disaster occur. It is only those organizations that do not take steps to shore up any vulnerabilities that are left high and dry in a worst case scenario.
These are just a few of the concerns that entrepreneurs should factor in if they are keen to prevent payroll mistakes from occurring, and getting expert assistance is a good idea if you are still overwhelmed.