Creating a payroll system as a new entrepreneur might be very daunting says Edmonton bookkeeping. However, it is extremely important that business owners do this early on in their business, and especially before they need to hire their first employee. Not only can creating a system ahead of time ensure that an entrepreneur is able to scale their business up whenever they need, but it can help them know exactly what they need to do as soon as they are ready willing and able to hire their first staff member. Unfortunately, many entrepreneurs do not know what they need to know about reading an efficient payroll system, and therefore have many questions.
One of the first questions that entrepreneurs often have is how frequently should they be running payroll. This is actually a great first question to have, and the earlier in a business it can be figured out the better. Typically, what is going to help answer this question is what the cash flow looks like in the entrepreneur’s business. And that is usually dictated by how frequently a business owner is billing their clients. Therefore, if they want to be able to pay their staff every other week, they need to ensure that there creating a billing cycle that is going to allow them to have cash flow in their business at least that often. If they are billing only at the end of the month, they may find that it can be too difficult to try and pay their staff biweekly.
The next question that entrepreneurs often have is how do they know they have enough money to be able to hire an employee. This is an extremely important question, and Edmonton bookkeeping recommends that entrepreneurs have saved up enough money to be able to pay their staff three pay periods. This will give an entrepreneur enough of a cushion that if they run into an unforeseen circumstance or their business slows down for a period, it will put their business at risk of not being able to pay their staff. When an entrepreneur has this much money saved up in their bank account, they should start thinking about when to hire their first employee.
The next question entrepreneurs often have is how much money do they pay their first employee, it should they be salaried or paid hourly? There is two things for an entrepreneur to consider when deciding between salary or hourly employees. While salary is typically paid to management positions, business owners need to be able to guarantee that they can pay their employee consistently the same amount every month. It may be difficult as a first-time staff member to take that kind of commitment. However, hourly means that they get paid by the hour so if there is not enough work, that employee can go home and they will save a wage. However, if they are working a lot more, but the entrepreneur has to be able to afford over time. These the important considerations that an entrepreneur needs to think of when hiring staff deciding if they are going to get paid a salary or by the hour.
It is very important questions that should be considered a very early on in their business ownership to ensure that they are laying the foundation properly to be able to meet their payroll goals. Entrepreneurs should ensure that they are consulting with their Edmonton bookkeeping company to help them create these payroll systems so that they know all of the important information to include in that system. This is important to ensure they have a seamless system in place to hire and pay their staff.
Edmonton Bookkeeping | What Business Owners Need To Know About Payroll
With how important this is owners understand checklists and templates are for businesses, ten bookkeeping says it is that important for payroll as well. If business owners can ensure that they have systems and templates build into their business ready for when they hire staff, they can ensure that they hire staff quickly and seamlessly as soon as their business is ready. However, they may require help doing all of the important information they should take into consideration.
Many entrepreneurs do not take into consideration how to account for their staff member’s time. It is important that they implement a time tracking system in their business early on. While many entrepreneurs believe that they are going to be able to trust their staff members implicitly, Edmonton bookkeeping says that time tracking software not only guards against time stealing from employees but actually is also designed in order to protect employees. To ensure all of the time that they have legitimately worked especially including overtime is being properly tracked and paid for. By implementing a great time tracking software, such as clock shark or key sheets, business owners can ensure that everyone is being treated fairly.
An important function of the time tracking software is to ensure employees are where they are supposed to be when they are supposed to be there. This is less of an issue if a business owner works in the same place and time as their staff members. However, if the business utilizes shift workers, or requires their employees to work off-site such as an electrician or a plumber it may be important to ensure that not only are staff members clicking and on time, but they are actually where they are supposed to be. Time tracking software has features such as GPS, or picture taking capabilities to ensure that employees are doing what they are supposed to be doing.
This time tracking software is going to create timesheets for business owners to give to their Edmonton bookkeeping company to enter into payroll. And business owners should ensure that regardless of if they have salaried or hourly employees, that everyone submits a timesheet. This is extremely important because many entrepreneurs think that their salaried staff do not need to account for their time, because they get paid the same amount every month. However, not only can this help business owners figure out how much time it takes to do certain tasks, they can also ensure that vacation and days off are also being accounted for properly. This is especially important if there Edmonton bookkeeping company is the one entering the timesheet information into the accounting software for payroll. If they are not aware that a salaried employee is on vacation, they will use the appropriate vacation time they have accrued, which could create problems in the future, especially if that employee quits or is terminated, and vacation time needs to be paid out.
By thinking of all of the different scenarios surrounding payroll, time tracking and timesheets, can ensure that an entrepreneur creates a system that not only is accurate, but is very to all so that when they need to hire employees, they know exactly how the employees are going to keep track of their time and ensure that they get paid efficiently and accurately.