Payroll System - Effective Payroll Management
Unless you're paying people cash under the table, your business probably has some sort of system to keep track of who's making how much. An effective payroll system is a way to manage your outgoing money and monitor how many hours your employees are putting in. If you don't have a payroll system, what exactly are you doing? Are you writing the hours down on a sheet of paper? Do you have a secretary doing the work? Are you hiring an accountant—or even better, employing an accountant to do this sort of work for you? Finally, are you trying to keep track of payroll yourself? If you're mathematically talented and can handle the job, more power to you. Most small business owners can't handle the constant figuring that goes on with doing payroll; this is why having an automated system comes in handy.
There are definite pros to having a payroll system in place. First, your payroll numbers will be more accurate. This plays a role when it's time to look at the books and you need to find out how much money you're paying out in wages and salaries. Furthermore, it prevents you from over- or underpaying your employees. While you'd definitely notice if someone making $45,000 a year was making $450,000, that same person will notice if you're paying him or her $35,000 instead. It works both ways. The two main reasons to have a payrolls system is accuracy and reliability.
On the other hand, there are very prominent cons to not implementing a payroll system. Without a reliable way to accurately keep tabs on employee salaries, you're liable to underpay as well as overpay. It may not be as extreme as the scenario posed in the previous paragraph, but a few dollars here and there will add up—especially if your business is full of hourly workers. Unless you want to break out the calculator and do the math yourself, a system handling payroll for you removes the doubt as to how much each employee is getting.
Having an efficient payroll system is a great help in bookkeeping and human resources. If you haven't considered utilizing such a system for your business, what are you waiting for? Instead of doing things the old fashioned way, it could be in your best interest to keep track of time and attendance by using a system designed for that very purpose.