It is obvious that Entrepreneur tends to get stress during the financial year end. Generally, Year end is the time to plan smart and to work hard. Lessening your stress will improve the smartness and more importunately, it would improve your life too. One of the major expenses your company incurs on payroll. The larger transaction would easily cause severe headaches. Every year your company would have faced critical issues because of payroll accounting errors. Now you do not have to worry about that. By following the below tips you would be able to get rid of the payroll accounting stress.
1. Employee classification is the first step of payroll accounting. Categorize your employees according to the status such as confirmed employees, temporary workers and consultants and independent contractors. This would help you to have a clear basic record and the payroll reporting for the tax purposes will be accurate.
2. Make a note of important payroll deadlines. Report and deposit your payroll taxes on time. Delayed deposits would cause you penalties.
3. Calculate overtime pay and report it on time. It is quite crucial to classify the "exempt" and "non-exempt" employees.
4. Distribute 1099 forms on time to your independent contractors who earn more than $600 / year. This would help you to avoid late penalties.
5. Do quality check on the data entry work. Data entry mistakes actually cost million dollars loss for a company per year. Hence, you should be careful with the data entry report. It may contain incorrect hourly wages and wrong number of employee hours or any other mistakes. Therefore, it is required to double check carefully as silly mistakes also cause a serious money loss.
6. Another crucial thing is the court ordered payments. It should be reached to the proper recipient. If you missed out court ordered garnishment, you will be fined more than 1000 dollars or you will be even imprisoned.
7. Do not upload all the information in a single mode. Do not rely on the software programs as any time any malfunctions are possible to happen. Enter all the important pay roll data and stored it on the external devices as well. If something went wrong on the software, you still have a copy of the details and you could move forward.
8. All the payroll records have to be stored for future use. Documents such as time sheets, cancelled checks and W-4 forms in a secured place. You are required to keep at least four to six years old documents in a safe and accessible location. If you fail to keep the previous records, it could lead to serious civil actions and high penalties. The records should be ready for inspection of The Wage and hour division of the department of Labor within 72 hours of notifying you. Hence, you could maintain a proper record which could be easily accessible.
9. Always the payroll information should be maintained confidentially. All the issues and details related to payroll should be within the payroll department and the senior management. If you fail to keep this confidential, you will be prosecuted.
10. Train more than one employee in the payroll department. If the primary employee got any emergency, another employee would take care of the tasks. Also have a manual backup system in case something goes wrong on the computer.
These tips would help you to be foster and employee satisfaction. Also by following these rules, you can avoid the big headache while handling payroll accounts and you would find it easy to deal with federal, state and local agencies.
Mary is a CPA. She is executing outsourced accounting projects. Integra outsourcing provides online accounting services for the companies all over the world. For more details, visit www.integraoutsourcing.co.uk.