A New Business Owners Guide To Payroll Procedures
Are you are a startup and are looking to simplify your ever complicating and time-consuming payroll system? Read this article to know the best practices of a good payroll system and the regulations and requirements associated with it.
As a new business owner, there are so many things to keep track of in your day-to-day life that your job can quickly become overwhelming. Especially in the early days when you may not have an extensive administrative team, you might usually find yourself covering the bulk of the day-to-day tasks of actually running the business.
To this end, knowing the basics of contemporary payroll procedures are an essential part of the new business owner's toolbox. While something as intuitively straightforward as payroll might seem easy, there are nuances and specific things to know about it in order to complete it accurately and professionally. Getting some guidance on some of the best practices in payroll, as well as some information on regulations and requirements, is important for business owners in all industries in Australia.
So, let's look at some of the essential things that new business owners need to think about with respect to payroll procedures.Be Conscious Of Single Touch Payroll
The single touch payroll system is now mandatory for all businesses in Australia. Making sure that you and your team are reporting your payroll to the Australian Taxation Office according to the established guidelines is important to ensure that you will be in compliance with the required legislation.
To make this process easier on you and your team, you can do what most businesses in the country are doing and explore the options for single touch payroll software. This will allow you to complete the required reporting to the ATO with greater accuracy and with software specifically designed for the purpose.
Do not let your payroll systems be stuck in the past and risk a penalty from the ATO. If you have not done so already, make sure that you switch over to the new system during this initial year of the single touch system when the focus of the ATO is more on helping people adapt rather than handing out fines and penalties.Set Up Your System
To set up a new payroll system, you will first need to find a payroll software package that works for your business. Once this is done, you need to input your employee information into the system including their names, addresses, and tax file numbers. Salary and wage details need to be determined by you, and agreed to by your employees) as well as the frequency of when your employees will actually get paid.
Single touch payroll, which we described above, provides a mandatory but straightforward way for you to stay on top of payroll information. This way, you will also be able to enjoy the benefits of up to date and accurate information in your payroll systems.
Finally, be sure to keep checking your payroll systems regularly even if you decide not to complete them by yourself. Make sure that your employees are satisfied with your payroll system, direct deposits are a big convenience favoured by most employees these days. Keep track of your payments and endeavour never to be late with a payment to your employees.Do It Yourself Or Outsource It
While you might be comfortable enough with the information outlined here to complete your payroll tasks on your own, there is always the option of hiring a professional accountant or outsourcing your payroll, and payroll reporting, to a third party. Weigh the pros and cons of each to find a solution that works for your small business.
Any option that you explore should be an improvement, not just someone taking over the job. If your reporting responsibilities have suffered over the last financial year, maybe an outsourced solution also provides the value of regular and professional reports. Decide what is your 'must-haves' and 'nice to haves' and see if you can find options that afford you both. You can even ask your prospective payroll partners what sort of clients they service, as this might give you an indication of whether they are going to be the right fit for you and your typical industry operation. Questions asked at the start will save questions down the line, so don't be afraid to exercise your power as a new business owner.Review, revise and thrive
Like any change in your business, there should be a time where you and your team review these changes and overlay successes and failures against these processes. Establishing now procedures can give new life and purpose to a once-aimless action, but it could also take you a step back. Even if you are just starting out!
Many clients turn to outsourcing after their internal improvements have not taken off, but it's important to record how and why these revisions impacted the payroll procedure so that your outsourced solution can provide the best solution for your unique business needs. A 'one size fits all' model is rarely an effective one, so take the time to engage your team and learn their grievances and insights to take to your new outsourced partner.
If you do find the right payroll partner, review the progress after the first few months and iron out any issues that you may be facing. Remember that you have an account manager or service representative, so don't be afraid to ask questions as a new business owner.
Whatever you decide, having some background knowledge and understanding of the principles outlined here will allow you to make better decisions and collect the right information when it comes to payroll. There are no silly questions, just silly businesses that proceed with an option that might not yield the results they are after due to poor planning and research. The more you know about each of the different areas of your business, the more effectively you will be able to run it.
