Do you know that about 54% of Americans experience payment delays due to errors with payroll management? The result is unhappy employees who delay remitting their debt and mortgage expenses. Sometimes, even the company can brace untenable losses.
Payday is among the best working days for business owners and employees. While employees get to carry home what they deserve, employers look up to this day to motivate their teams. You want the payroll management software to be as quick and efficient as possible.
Fortunately, you can mitigate most of these errors with your payroll management team. Once you get everything right, the payroll system will work efficiently for years to lower the chances of late payments.
Here, we highlight the top five errors with payroll management and how to mitigate them.
1. Overtime Hours Miscalculation
There are different ways of calculating employee overtime, depending on your jurisdiction of operation. For instance, some states may require you to pay for extra hours worked over regular workday hours. For covered employees, this rate can be up to 1.5 times the PROP.
To avoid these errors, we recommend complying with the payment overtime rules in your state.
2. Late Payrolls
No matter how busy your business operations are, never miss your employees’ payday. Unsatisfied employees can be the genesis of many problems you don’t want to experience. Moreover, unnecessary lawsuits can be a costly mistake.
Another danger of late payments is that you can overpay or underpay the employees. You can avoid these mistakes by outsourcing payroll management software. Click here to compare different online payment service prices.
3. Bookkeeping Errors With Payroll Management
If you’re looking for the best way to manage payroll, doing away with bookkeeping errors should be your first strategy. That means integrating the payroll in your accounts book. Doing this gives you an in-depth insight into the cash flow meant for employee salaries.
You’ll know how much money you have to pay for emergency leaves. Also, you’ll know whether you can pay workers who resign from their jobs before payday. Note that some states may require you to pay any dues on the same day.
4. Earnings Misclassification
Earnings miscalculations could mean unsatisfied employees or losses to the companies. This is because your payroll management team will either underpay or overpay the workers. Thus, you would want to classify all payments as either discretionary or non-discretionary to avoid this error.
5. Inaccurate Working Hours Record
Your business might have two types of employees, including covered and non-exempt. For covered employees, your payroll management software must capture their actual working hours every day. For non-exempt employees, you must record all workweek hours.
You would want to outsource a payroll management team that utilizes the regular pay process (RROP) for compliant wage statements. Additionally, it will help if you check your jurisdiction requirements for working hours document retention periods. This can save you from lawsuits.
Enjoy Seamless Payment Processes All-Year Around
Mitigating the errors with payroll management with the above tips can save you from costly business mistakes. Further, avoiding late payments will help your business comply with various federal, state, and county laws.
Don’t let the mistakes in your payment system bring down what took you years of hard work to build. You can read other blog posts on our website to get expert insights into business topics.
