Entrepreneurs should be giving thought about their system for managing payroll early on in their business advises Edmonton bookkeeping. The reason why, is because having a system that works well together requires a lot of little steps to work properly and integrate together. The book the checklist manifesto written by author Atul Gawande says ìwe always hope for the easy fix: the one simple change that will erase a problem in a stroke. But few things in life work this way. Instead, success requires making a hundred small steps go right, one right after the other with no slipups, no goofs and everyone pitching in.î Not only is it does a well-running payroll system require many small steps working together, but it requires focus and deliberate action. If an entrepreneur does not think of this ahead of time, they may find themselves ready to scale up their business, but are unable to, because they do not have a system in place yet. This could potentially stall their business, release cause them to not hire their staff as fast as they should be.
The first thing that entrepreneurs should be thinking about is if they are going to be managing the payroll themselves as many entrepreneurs do especially in the beginning. If they are going to be doing it themselves, they should ensure they have payroll software. They are already using accounting software like QuickBooks Online, is already a built-in component to help manage payroll. If they need to purchase specific payroll software, they should investigate all various options to ensure that it will integrate well with the accounting software that their Edmonton bookkeeping company uses, to ensure that they will be able to use the information that the entrepreneur gives them payroll.
Business owners should also ensure that they have pre-thought about what they need to do to track their employee’s time. All employees should be submitting timesheets, including salaried employees. Many entrepreneurs think that salaried employees do not need to submit timesheets, because they get paid the same every month, regardless of how many hours they work. However, Edmonton’s bookkeeping says that the reason why salaried employees need to submit timesheets is that they need to also track their days off and their vacation. Especially if Edmonton bookkeeping is going to be managing the payroll for the entrepreneur, they need to know about all vacation used, so that they can ensure that they are using the accrued time on their vacation weeks, so that at the end of the year it shows the correct number of hours accrued. This is especially important for if an employee leaves the organization because they will get paid out all accrued vacation time. If their vacation time has not been taken off properly, they may get paid out more vacation than they actually are owed.
It is also important for entrepreneurs business owners should ensure that they have thought about who is going to run payroll, and what software they are going to use as well as ensuring that they have systems in place to track the time of all staff members. A very efficient payroll system requires deliberate thought, and ensuring the right software is in place. When entrepreneurs do this ahead of time, they can ensure that they are ready to manage employees as soon as they need to hire them.
Edmonton Bookkeeping | Effective Payroll Strategies
One of the first goals that entrepreneurs have when they start their business, is to grow it efficiently and quickly according to Edmonton bookkeeping. However, if an entrepreneur wants to scale up their business, they do not have a payroll process in place, can make it very difficult for them to take that first step in hiring someone. Ensuring they have an efficient and effective payroll system in place is extremely important, and should be done before an entrepreneur actually needs to hire their first employee.
One of the first things that entrepreneurs often wonder, is when will they know they are ready to hire their first employee. They may think it is once they have hit a certain revenue per month, or when they are working a certain number of hours per week. These are all good indicators, but it has an entrepreneur who should be thinking of ensuring they have enough cash to pay for the employee that they are hiring as well. Edmonton bookkeeping recommends entrepreneurs have enough money in their bank to be able to pay that employee for three time periods. This will ensure that they have enough of the financial cushion to continue to pay that staff if they encounter any unforeseen circumstances in their business.
The next thing that entrepreneurs should think of, is the frequency of when they are going to be paying their employees. The reason it is important to think of this ahead of time, so that an entrepreneur can ensure that they are managing the cash flow into their business to allow that frequency to happen. For example, if they get into the habit of only building their clients once a month, they may only have the main cash flow into their business once a month, making a biweekly payment schedule difficult. If entrepreneurs think of this ahead of time, they can ensure their building their clients more frequently, in order to ensure they are bringing money into their business more often.
It is also important for entrepreneurs to ensure when there choosing their cut off and pay dates, that there is at least a week in between cutoff and their pay dates. The reason for this, is so that entrepreneurs have enough time to review the payroll that their Edmonton bookkeeping company has prepared to verify its accuracy. Also, the longer the cut off time is before payday, the more opportunity an entrepreneur has to bring money into the business if they do not have enough money in their bank to cover payroll.
By thinking of all of the various aspects of a payroll system, an entrepreneur can be prepared to hire their first employee as soon as they are ready. By creating a system early on in their business, a business owner can then focus on growing the business confidently, knowing that they will have the ability to hire employees as soon as they need to.