Creating an efficient and effective payroll system is extremely important, and requires a lot of different components working together efficiently and effectively says Edmonton bookkeeping. The author of the checklist manifesto, Atul Gawande had this to say about ensuring systems had the right component parts working together: 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 that way, instead of success requires making a hundred small steps go right, one right after the other with no slipups, no goofs and everyone pitching inî
One of the most important component parts to an efficient and accurate payroll system is the timesheet. Gone are the days of asking employees to write on a piece of paper when they arrived at work. While timesheets have been used to guard an employer against dishonest employees who would steal time, either by saying they are at work before they get there, or that they are there longer than they actually were. However, Edmonton bookkeeping says that nowadays, not only does the timesheet protect an entrepreneur against dishonest employees, but it actually also protects employees to ensure they are getting paid for all of the time that they put into the organization. By having sophisticated software that is failproof in guaranteeing that employees were at work when they said, makes it very difficult for business owners to underpay them, or disregard over time.
Entrepreneurs often think that timesheets are only needed for their staff that are paid hourly. However, Edmonton bookkeeping recommends that regardless of how an entrepreneur pays their staff, all staff members should be submitting timesheets. This is extremely important especially if an entrepreneur is outsourcing their payroll to the Edmonton bookkeeping company. That company needs to know when the salaried staff took a day off, or took a vacation in order to ensure that they are accrued vacation time is used for that pay period. The reason why this is so important, because if this does not get accounted for, the employee might take more vacation than they are entitled to, or if they get paid that vacation out at the end of the year, a results in them getting more pay than they deserve. Also, if that employee leaves the organization for any reason through their own will or because they were terminated, it might results in them getting a higher vacation payout then they are actually owed.
The reason why it is important for an entrepreneur to consider time tracking software and timesheets because it is important that these integrate with the accounting software that their Edmonton bookkeeping company is going to use. Especially if they’re outsourcing their payroll, ensuring they have accurate and well-kept records to ensure the payroll gets done properly is extremely important. So in order to figure out payroll, an entrepreneur needs to figure out what features are needed in their time tracking software, and ensure that every employee has access to the time tracking software so that they can generate timesheets for all staff, to ensure the accuracy of the payroll.
Edmonton Bookkeeping | The Importance Of Timesheets
business owners often are not thinking of timesheets when there creating a payroll system in their business says Edmonton bookkeeping. However, it is an important aspect of an efficient and effective payroll system that is going to ensure an entrepreneur is paying their staff efficiently and effectively. Regardless of how an entrepreneur is going to pay their staff, whether it is hourly or salary, they need to ensure that their thinking of all of the moving pieces to the puzzle to create a system that is going to be accurate and fair.
One of the first things that an entrepreneur needs to consider when they are implementing a payroll strategy in their business is how frequently they want to pay their staff. The reason why this is important is because the cash flow their business is going to depend on how frequently an entrepreneur is going to be able to pay their staff. And what is going to dictate the cash flow in the business, is how frequently an entrepreneur is billing their clients. All of these various parts work together, and if an entrepreneur has decided early on in their business that they want to pay their staff frequently, they have to bill their clients just as frequently. If they get into the habit of billing their clients only monthly, because they are small and it seems inconsequential in the beginning, they may get caught in a trap of only ever billing their clients monthly, which could force them into having a monthly payroll.
The next thing that entrepreneurs often wonder is when do they know when the timing is right to be able to hire an employee. Since most entrepreneurs start their business with not enough time and not enough money, it can sometimes be very difficult to tell when the best time to hire help will be. Is it when they are working twelve hour days seven days a week? Or is it when they reached a certain revenue per month? Regardless of any of the answers to these questions, Edmonton bookkeeping says an entrepreneur needs to have generated enough revenue in their business to have saved up three pay periods for that new employee in their bank to ensure there is enough cash flow in their business to be able to consistently pay their staff. Not only does that give them a revenue goal, it actually helps them create a question so that if after they hire an employee, something unexpected happens in their business, they are still able to pay that employee.
Creating appropriate and effective payroll strategy includes thinking of several different aspects including timesheets, and time tracking. When an entrepreneur thinks of the system ahead of time, instead of acting reactively when their employee is hired, they will be able to ensure an efficient and effective system that works well for everybody.