Management Tips for Accurate, Efficient Payroll

Payroll management involves more than monitoring the time clock. Nowadays, the payroll function is as complicated as ever, especially with federal government oversight of corporate accounting practices, several different types of automatic deductions, and international staffing. In such an environment, payroll calculations are usually automated, though some smaller companies still use a manual system to compute paychecks and hours worked. However, even in the case of entities with fewer than 50 workers, automated time clock systems are very common.

The best way to make certain that there are no major errors in payroll checks is to use a reliable and consistent method of calculating all check amounts. Whether your company uses electronic time clock systems or online time loggers, be attentive to keeping accurate records of hours worked for each employee.

Some modern time clocks do a variety of calculations that were unheard of just two or three decades ago. And some old systems still work, despite their age. A punch card system works well for organizations that have fewer than 50 workers.

For large firms, time loggers work well. In these computer-based systems, workers check in via their computer terminals. In some cases, computer-timing programs use a magnetic terminal for swipe cards. Large companies are especially susceptible to time fraud due to the impersonal nature of the systems and vulnerability to hacking. Some of the higher-end programs contain subtle but effective safeguards against such activity.

Whether large or small, every business should keep a separate bank account for payroll funds. In fact, a patchwork of federal and state laws require certain types of entities to maintain separate accounts for payroll purposes. Aside from the purposes of the law, it is a wise practice to label a bank account specifically for payroll. When tax time comes, companies who have accurate records and segregated accounts will be in a better position to prepare accurate tax returns quickly and simply. When it comes down to it, a time clock is the basis for vital payroll calculations, pure and simple.

Common Payroll Mistakes to Avoid

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The IRS has several rules and regulations when it comes to governing payroll. Your mission, whether you are a business owner or payroll manager, is to avoid running into problems with the IRS. Avoiding an audit is a goal for anyone, and can be done partially by not making mistakes with payroll.

Payroll seems so simple. Yet, one mistake can bring problems both from the government and your employees. According to the IRS’s “Employment Tax Research Project” payroll mistakes tend to fall into four categories. Whether because of wrong time clock data or deliberate fraud, payroll mistakes tend to occur in:

·       Fringe benefits

·       Worker misclassification

·       Payroll taxes

·       Executive compensation

Broken further down, common payroll mistakes made by businesses tend to boil down to:

1. Classification of Employees as Independent Contractors

2. Failure to Subject Vendor Payments to Backup Withholding

3. Failure to Issue Form 1099s

4. Not Including the Fair Market Value of Gift Cards, Prizes and Awards in Employees' Income

5. Failing to Timely Deposit Withheld Taxes

6. Failure to Timely Deposit Withholding Taxes on Vested Restricted Stock and Exercise of Stock Options

7. Incorrectly Excluding Expense Reimbursements from Reportable Wages

8. Failure to Include Nonqualified Deferred Compensation in Executives' Incomes

9. Not Including the Appropriate Value of Taxable Fringe Benefits in Employees' Income

10. Excluding Travel and Commuting Expense Reimbursements from Employees' Income.

Avoiding these mistakes can be as easy as investing in a new time clock or even hiring outside payroll management. Either way, it is always in your best interest (and your employees’ interest) to have an efficient, effective payroll system in place.

Working With Others

If you share workspace with others, there are quite a few written, and unwritten, rules you should know. Of course, not all common work areas are the same, but in general, it is best that you try to be self-sufficient.

A time clock might be at the entrance and perhaps you need to punch in or just use it for specific jobs. Know the rules about the time clock and who should use it.

It also helps to know how much talking and chatting is tolerated. Some workspaces are silent, but most allow at least a moderate hum. Try to learn the upper limits of noise and adhere to the common rule.

Keep in mind that you should not bother others with questions that pertain to your own work. If you are self-sufficient, moderately quiet, and know about time clock rules, a common work area can be your friend.

The secret to getting along in common work areas has to do with friendliness. Try to stay in the social network and do not abuse the allotted time for work in the area. Often, shared workspace is used for events in the evenings, so you need to know when to make a timely exit. A visible time clock can help with this detail. Networking with the other employees and respecting the space usage policy are two habits that will make you a good neighbor to your comrades.

Finally, remember that the kitchen area is for your use, but the food is not. Unless a food item is specifically marked as a group item, do not touch it. Bring your own food and eat it in the kitchen. If others do the same, everybody will be happy and there will be no bad feelings about ‘stolen’ meals.  

The Uses of a Punch Time Clock

The time clock has become a very important tool in the business. Time clocks can not only help monitor work places but can also establish a clear vision of the working time in the company. A punch clock has many benefits for all parts of an enterprise, as well as for management employees.

Punch clocks help record time in and out by employees and workers. Not only are these time cards used for payroll, but they can also be used to help monitor how much time is spent on specific projects as well as on working schedules of specific departments. In addition, punch time clocks can help provide a clearer image of what the bottom line of the company is, and is not, completing.

More modern time clocks offer other features. Building security, including management of time management, secure entry and management of movements in different spaces are just a couple of things that a time clock can do for a small business. User management with access controls for visitors whether they are customers or suppliers and parking management. A time clock can intervene to control access or entry point in a building to identify, authenticate, authorize or prohibit the attendance areas for which it is programmed.

The advantage of the time clock for various stakeholders of the company, department heads, and administrators lies in the ability of terminals to record and make available comprehensive information. Information from the time clock is pulled off as easy as it is put on. Employees will time stamp their hours simply by “clocking in”. Payroll will then break down the hours and then count log the time they clocked in and clocked out, totaling the hours up and then cutting a check.

In the end, while a punch time clock is not for everyone, there are numerous other options on the market that offer a variety of features. Do your homework and decide whether a punch clock is for your or if a different model would better suit your needs.

Implement a Time Clock System Effectively

Implementing a time clock system for your company involves a bit of thought. Depending how many employees you have, how large your facility is, and what level of security you need, you will want to invest in a time clock system that is just right. There are currently so many different systems on the market you might be confused by the selection. Keep in mind that a simple time clock can meet most of your needs if you use it correctly. Larger, more elaborate systems typically involve computer software that monitors hours worked, employees names, and dozens of other parameters.

Be sure to put the time clock in a place where every worker will see it. This is crucial. If you put the device in an out-of-the-way location, you risk losing valuable data, as some workers will not see the clock and will begin work without logging in.

It is wise to put a large, company bulletin board near the time clock in order to make it a gathering place for your personnel. When the clock is in an open location, which gets a lot of traffic, there is less chance for fraudulent behavior.

Perhaps the most vital aspect of time clock management is making sure that every employee knows how to operate the device. Most companies hold training sessions when a new clock system is purchased. After that, try to make time clock training a standard part of each new hire’s orientation.

Some of the newer, biometric time systems are quite expensive, but are perfect for organizations that need high security. A biometric time clock uses fingerprints, iris scans, or other physical characteristics to track employee access to the building and to log the proper number of hours worked. Usually, the more expensive the time clock, the less chance there is for fraud.

How to Cut Costs and Be Efficient

As a business owner, you are probably constantly looking for ways to increase profits and increase business. At one point in time, you have most likely thought of cutting expenses to help boost profitability. Technically, it doesn’t matter if you’re having the best quarter in history because when it comes down to it, costs that are out-of-control will quickly eat up any profits that you gain.

Avoid going under by keeping a close eye on your expenses (you can use a business accounting tool). While cutting expenses can help greatly, be smart about what you cut. You don’t want to sacrifice efficiency for cost.

Here are some tips to being cost effective when making budget cuts:

• Try out a new telecom system. This can range from Internet to landlines to wireless providers.
• Enforce the “no splurge” business travel rule. This technically means that your staff cannot spend whatever they want when they travel. Make them accountable for what they spend.
•  Move your IT network to the “Cloud”. Whenever you have the chance to move digital files and other software off your computer to another place- do it.
• Cut back on overtime. Switching from a time clock that uses paper to a computerized time clock is a great move. It saves you money on multiple fronts.
• Earning vendor discounts using credit is smart. Early payment discounts offer by a selection of vendors can save you thousands of dollars a year.

Cutting your expenses should only mean one thing: you gain more profit. By viewing these areas, you will hopefully be able to maximize your profits without losing efficiency.

Time Clocks for Business Efficiency

A traditional timesheet allows a company’s employees to record exactly when they start and end work. For a number of employees, this will amount to starting their work at the beginning of their shift and punching out whenever it ends. For the others, this could involve keeping a detailed list of start and stop times for their various projects, activities or jobs during the day. No matter what your business may need, time clock software will allow your employees the ability to record information more easily, objectively and actively.

Time clock software will help lower any operating costs that your business may have by making your payroll processing become more efficient along with making labor costs a lot more visible than they were in the past. It will also ensure attendance compliance and helps automate any invoicing or billing of your clients. Here are a few reasons how time clock software will help your business in today’s rough economy.

It simplifies your payroll

Time clock software will take every punch that your employees have accrued within a certain amount of time and it will generate timecards based on whatever your payroll is set on. Your regular hours, paid leave and overtime are all calculated for you and totaled instantly so you don’t have to do the math yourself.

It ensures compliance

A time clock is going to allow you to fully manage your attendance and employee time, even when it comes to lunch breaks or sick leave. With certain units, employees cannot punch in or out for each other, ensuring that the hours recorded are honest.

It manages the labor costs for you

Whenever you do payroll, your time clock software will figure in everything for you when it calculates the weekly attendance. Whenever you input your employees into the system, you will be asked to put all pertinent information into the software. This will allow the software to figure up everything for you. All you have to do is print out everything and take it to payroll, or even export to payroll software directly.

It automates client billing

Remember that client billing should be summarized by the job or the client so it can be accurately billed. A time clock can help with this process, lowering error by inaccurate recording as well as providing an efficient way to track multiple projects.