– by Michael Reis, VP of Sales
2022 is quickly coming to an end. Now is a great time to re-evaluate vendors and technology solutions that help run your business, including your payroll and human resources system.
Payroll is a critical part of your business. It’s critical that the system and process you are using is effective and accurate to get your employees paid on time. Otherwise, you risk facing hefty government fines or worse…losing employees due to lack of trust.
Three reasons to evaluate NOW
Business Goals
You are likely strategizing for 2023 – setting goals and determining the tactics, people, and tools required to achieve them. It might not seem obvious, but the right payroll and human resources solution can play a big role in helping you achieve many of your business goals.
For example, if you are looking to find ways to free up your HR team’s time so they can focus on connecting with candidates, a modern payroll and HR solution can help do just that by automating much of a, traditionally, very tedious process. Or maybe you are looking to enhance your employee onboarding process by getting new hires in the system and up-to-speed faster. A payroll and HR system that’s built into your recruiting and hiring technology will seamlessly transfer new hire data, speeding up the process and reducing the risk of error.
Your 2023 Budget Preparation
The 4th Quarter is also a time for annual budget setting, which often requires you to find ways to cut costs. A significant cost associated with payroll and HR is what we call “over sold and under delivered.” A lot of the “other” companies sell you services that you don’t need or put you in a bundled solution and you only use a portion of the bundle. These extra fees add up throughout the year.
To avoid such fees, partner with a payroll system that has a transparent cost per employee per service. This can ensure you don’t get over sold for products/services you don’t need. The budget typically lost to various payroll fees can then be re-allocated to other areas of the business to help you continue to grow throughout 2023.
The right payroll system can also help you reduce excessive overtime costs. By running your payroll through an integrated workforce management system, you can receive notifications each time an employee is approaching 8 hours in a day or 40 hours in a week to prevent costly overtime. While workload calls for overtime on occasion, you don’t want to end up paying far more in overtime costs than what’s absolutely necessary. This simple change can save your business thousands of dollars throughout the year.
Payroll-related costs can make up a majority of your business expenses, so it’s critical to ensure you’re paying employees, and tracking other talent management costs, as accurately and efficiently as possible.
It’s the Start of a New Tax Year
By running your last payroll of 2022 on your previous payroll system and the first payroll of 2023 on your new system, you can make a clean switch to kick off the new tax year. With the new year, all payroll and other talent management-related numbers are reset, meaning you won’t have to go through the process of balancing payrolls from your old system year-to-date. But make sure you maintain a record of all payroll information from your previous provider before ending the relationship, just in case you need to access the information in the future.
When it comes time to file 2023 taxes, pulling payroll records from one system will make the task easier on all parties involved, and ensure greater accuracy. And payroll accuracy is key to saving your business from costly fines, as approximately one-third of businesses face IRS penalties each year due to payroll errors. The right payroll provider will help you pay all employees with complete accuracy, and provide the necessary tools to maintain tax compliance, despite ever-changing compliance regulations.
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*Southland Data Processing, Inc. (“SDP”) is not a law firm. This article is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other SDP materials does not create an attorney-client relationship. SDP is not responsible for any inadvertent errors that may occur in the publishing process.