Payroll is one of the most critical aspects of running your business. Your people are your biggest asset, so it is essential to ensure 100% accuracy when running payroll to mitigate risk to your organization and keep employee satisfaction and morale high! Salopek & Associates has put together some tips and best practices to help small businesses manage their payroll.
- Have a Clear Payroll Policy: Ensure you understand the current provincial and federal labour laws. Develop a Payroll Policy aligned with legislation, that defines payroll frequency and how total expected remuneration is calculated. Set a schedule for how often employees are paid and define how wages are calculated, either on at an hourly rate or a fixed salary.
- Set Up a Payroll System: Decide if you plan on administrating your payroll manually, through a payroll software, or if you will outsource the payroll management. Each option has both pros and cons, depending on how much time and money you want to invest into your payroll monthly. Manual payroll administration can be the most cost effective, however, it is tedious, time-consuming, and errors are more common. Outsourcing payroll and investing in software is a wise decision, as errors can be costly and lead to additional time and money spent fixing these errors.
- Classify Your Employees: Group employees into different categories to make it easier to establish what legislative payroll laws apply to each employee grouping. Ensure you are following federal and provincial legislation including minimum wage, overtime pay, holiday pay, vacation pay, and calculating the correct payroll deductions based on each category.
- Invest in a Time-Tracking App or Software: This is important to consider if you have hourly employees. Utilizing a time-tracking app that automatically synchronizes with your payroll software will save you time when calculating the total hours each employee worked.
- Schedule Enough Time to Process Payroll: Payroll is a time-consuming task and should not be done last minute. Errors can easily be made with Payroll processing, even when using an automatic software system. The last thing you want to do is make a mistake, miss a deadline, or not pay employee’s correctly or on time.
- Create a Year-End Payroll Checklist: If you are a small business owner, you know the headache of completing your year-end payroll. This is one of the biggest tasks that can have the highest risk with errors. Create a year-end checklist to ensure you are reconciling your payroll accounts for tax deductions, special payments not included in T4’s, and many other items that need to be double checked to ensure 100% accuracy. Contact Us for a comprehensive year-end payroll checklist.
Payroll is highly specialized and outsourcing to a Payroll Professional is recommended. At Salopek we have Payroll Specialists who can help administer and manage your organization’s payroll needs or be a back-up to your regular payroll professional. It is also recommended to have an independent third-party assessment/audit completed to ensure your payroll is administered properly. Our Payroll Specialists are experts in third-party payroll systems such as Ceridian, Dayforce, and Payworks. Implementing a new payroll system can be complex and if you are contemplating a change or setting up a payroll system for the first time, a consult with a Payroll Specialist is recommended. A Payroll Specialist will ensure that processes are compliant, aligned with best practices, and risks are mitigated by pro-actively reviewing payroll practices. Mistakes can be costly!
Your employees trust that you will ensure their pay is managed properly and the reputation of your organization depends on it. Seek the advice of a specialist – contact Salopek & Associates to speak with one of our Payroll Specialists.