Running a business of any kind will always come with competing priorities and challenges, however, professionals working for small businesses can often take on more than their capacity. Small business payroll can be an important duty managed by already-stretched business owners or management, rather than using an outsourced payroll provider that can consistently deliver on-time payroll compliant and reflective of current award rates and entitlements.
Our Top Payroll Tips for Small Businesses
If your small business would like to sharpen its payroll output or gain a better understanding of small business payroll best practices, then read on for our payroll tips for small business:
1. Explore modern payroll software and solutions
Many of the payroll friction points come from outdated systems which cannot reconcile and deliver payroll through one platform. Overhauling these systems and exploring modern, intuitive software alternatives, alone can relieve the payroll pressure experienced by small businesses. i3Group’s outsourced payroll professionals have worked with small businesses of all varieties, and have been able to implement payroll software that is purpose-fit and able to get the greatest results, ensuring your business has the best tools and systems in place.
2. Accurate, updated and secure data input
Whether your small business has a Human Resources department or not, managing employee data can be an ongoing task for any size business. Correct employee data serves a number of purposes, but most important is the fact that it is a compliance requirement by the ATO. One of our most important payroll tips for small businesses is to communicate this priority to your workforce to ensure that the following details are up-to-date:
- Employee date of birth
- Employee full name
- Employee address
- Employee Tax File Number
- Employee start date (and finish date if they have left)
- Employee’s nominated bank details
- Employee pay details (including gross wage, allowances, hourly rate)
Another benefit to modern small payroll systems is that they can store this data and ensure 100% data protection.
Financial professionals will have a deep understanding of the need for bank account reconciliation and the role that plays within the payroll ecosystem. For small businesses, the rationale for reconciling bank accounts may not be as clear, but it is certainly important. Simply put, reconciling your bank accounts is about ensuring that the money that leaves a business account can be reconciled with the money that was spent.
Payroll reconciliations include:
- Reconciling the payroll tax for any given money
- Reconciling superannuation: monthly or quarterly
- Reconciling outstanding PAYG to unpaid PAYG (which makes up part of the Business Activity Statement
- Reconciling gross wage totals for the YTD
4. Ensure ATO compliance
Every small business sets out to do the best for its employees and position its business to be in a healthy, compliant structure. The truth is, times can get busy and industry changes can impact our business – even the ones we do not pick up on right away. When small businesses partner with an outsourced payroll provider and use modern payroll systems, these ATO reporting requirements and legislation changes are implemented in real-time, so that award rates and pay cycles are accurate and compliant.
When looking at payroll in Australia, there have been new changes to small business payroll that have been driven by technological advances, with Single Touch Payroll being a prime example. If you are looking for payroll tips for small business or simply want a trusted partner to keep your payroll ahead of the industry, then speak with i3Group today.
5. Aligning existing systems
The ideal payroll solution will always depend on the nature of your small business and the software and systems that your business already leverages. Where possible, seek to find payroll integrations that will allow you to carry information from one system to another, eliminating the need for double handling and extra administration work. For example, if your small business employs a casual workforce and uses roster management systems, this can be linked with time and attendance tracking and then sync with payroll. By working with an outsourced payroll provider, they will provide payroll tips for small businesses and structure an effective suite of online tools that communicate with one another to ensure accurate data and seamless functionality.
6. Keeping records
It is true that modern payroll systems will actually collate and store data, but you should place importance on keeping records that relate to your terminated employees, payroll details that were stored in spreadsheets and other payroll reconciliation reports. A good rule of thumb is to store records for up to five years, as well as digitising data where possible and safe to do so. If you are in discussion with an outsourced payroll provider or exploring an online payroll solution, be sure to ask what happens to the data when you migrate across systems as this information might be critical to the running of your small business.
If you are curious about what a custom small business payroll solution could look like for your business and employees, or even wanting advice on how to start a business in Australia, i3Group has been working with small businesses for more than 20 years. Contact i3Group today or book a demo!
Interested in more small business advice? Check out our master guide here!