Best practices for payroll: What you need to succeed

Choosing the right payroll system isn’t as complex as it seems. Once you understand some of the best practices, it’ll be easier to make an informed decision—one that not only works for you but for your employees as well.

So what should you be looking for specifically? Let’s take a look at a few ways to save time (and potential headaches) so you can set up your payroll properly and start your business on the right track.

Go paperless

Checks are starting to look a lot more like fax machines: old and outdated for almost every business. Do yourself a favour and save the time it takes to write, print and distribute physical checks. Your employees will also thank you for the convenience it gives them.

Not to mention, you’re required to keep payroll records for two to seven years for auditing purposes. Think of all the trees you’ll save!

Automate, automate, automate

Let’s face it—you don’t type in every single email address before sending your e-newsletters. And you don’t write out your employee’s schedules by hand anymore. The most effective systems, including payroll, are the ones that run automatically in the background after a quick set-up.

Remember, the less you have to manually monitor your paperwork, the fewer payroll mistakes you’ll make.

Focus on the right features

You want to make sure your business’s specific needs are in line with your payroll system. The basic functions you’ll need are direct deposit, pay stubs and tax forms. Next, you want to see how much tracking you’ll need for your employees, such as vacation time and/or hours worked.

You also want to make sure you’re not paying extra for extra features you don’t end up using. Some payroll systems come bundled with a ton of human resources tools, but if your business doesn’t need those then they’ll just bog you down. After all, what’s the point of bells and whistles if all they do is cause a lot of noise?

Give employees access

The benefit of giving your employees what they’re looking for upfront is actually two-fold. First of all, they’ll appreciate the convenient instant access to their pay stubs, tax forms and vacation days. Secondly, it saves the back-and-forth from fielding each and every one of their requests at different times.

Be professional

Of course you’re going to want efficiency when it comes to payroll by saving time and money. But sometimes there are effects that can’t be measured so concretely. For instance, how professional you come off to your employees and, quite frankly, how you view your own business as well.

It’s one thing to pay your family members in cash for the first few months that they’ve helped you out. But if your business is growing enough to hire multiple employees, you want to have a professional small business payroll system ‍in place. Not to mention it will cut down on costly manual errors!

Set your business up for success

With some of the payroll tips we've shared above, you should be all set to sink your teeth into payroll! If you’re in one of Wave’s tax service states, you’ll be eligible for automatic filings and payments for state and federal payroll taxes by signing up. And as always, we also provide automatic tax remittance to the CRA in Canada.