Managing a small business comes with many benefits, but it also comes with many challenges that entrepreneurs and managers need to overcome. For some, payroll tends to be an ignored but often difficult area, as there are many common mistakes we can make, especially during the early stages of our journey. That’s why we should always consider working with a team of payroll professionals so that they can take care of this part of our business.
Surprisingly, one of the most common mistakes businesses tend to make is missing deadlines and due dates of our taxing duties. Reporting and depositing our payroll taxes to both federal and state agencies on time should be one of our company’s priorities, as failing to comply can result in interest charges and penalty fees. Keeping a payroll tax calendar and updating it as often as possible can help us avoid making this common mistake.
Nowadays, it is common for companies to hire different types of workers that no longer qualify as employees, since freelancers, contractors, and consultants have successfully joined the workforce. As a result, we can easily end up misclassifying those who work with us, which could lead to issues and errors when we report our payroll information for tax purposes. When we hire a team of payroll consultants, they can make sure these errors simply won’t happen.
Keeping our records and employee data accurately and without mistakes is another surprising challenge that we will have to deal with as we start our own business. Mismatching names with Social Security numbers, for example, is a common mistake many companies make, especially those with little to no experience with data entry, or without a payroll department in charge of collecting and correcting such information. Having poor records of employees’ data can result in several penalties and fines, so we should pay a lot of attention to detail when filing payroll reports.
For many small business owners, purchasing payroll software is enough to help them manage their records and comply with all deadlines and tax requirements. However, having the best payroll software doesn’t guarantee an error-free management of this area, as we might not have the required training to fully use and take advantage of this software. Also, we often forget that the programs we use are as good as the data we enter, which can cause miscalculations due to lack of proper information.
Therefore, we should consider hiring a professional team of payroll accountants to run this are of our business, guaranteeing that no mistakes are made, and ensuring that we remain compliant with our tax requirements and payroll responsibilities.