Don’t let Payroll bite you in the arse
So business is booming and you need to hire staff. You should be so excited (and proud). But payroll is not for the faint hearted #understatementoftheyear
Even with the best accounting software in the palm of your hands (or pocket), payroll and employer obligations can be a minefield, and difficult to navigate.
There are minimum wage requirements, payslips, withholding the right amount of tax, paying superannuation, overtime, bonuses, annual leave, sick leave, rosters just to name a few of the obligations.
“And that is just scratching the surface. So what the heck is below the surface?”
Well there are also all the “touchy feely” things you need to get your head around – internal policies, ensuring they feel part of your business, really involving them in your business, trusting them, mentoring them, training them, managing them.
And that is just scratching the surface I am sure. We all have different ways that we work, so what works for one business owner is not necessarily the right way to deal with your staff. And far too often in those damn pesky Facebook groups, business owners who are clearly doing the wrong thing with their employees are very quick to offer their advice.
“You need to ensure your “bullshit radar” is well and truly on when you seek out payroll advice and ensure the advice you are getting is quality, and not just the easy option.”
So here are my top 5 tips to run payroll and not have it bite you in the arse later on:
- Always have an employment contact. Jesus this should be obvious and non negotiable, but the amount of times we speak with clients and this doesn’t exist is just darn scary. The employment contract should set out the basics. For example, start date, employment basis, leave entitlements, hours, pay rates, expectations, probation periods – and it should be signed by the employee and the employer to show that you are all in agreement with the conditions.
- Do the hard yards before you hire an employee. So this includes all the technical nitty gritty. So work out their pay rates, their employment status, their hours, who they are reporting to, what forms you have to give them, how frequently payroll will be run, how will they submit timesheets, how will they access their payslips. And if all of that sounds like I am talking Chinese, then please please please we beg you to get some help ensuring the back end of your payroll is spot on. Not getting it right from the start – that is where the headaches begin.
- Payslips – yes, you need them. It does seem quite archaic to send out payslips – but this is where your accounting software becomes your best friend. You can provide the payslips electronically – but the employees need to receive them or have access to them within 24 hours of the payroll period ending. So not much time to faff about with manual payslips. Send them by email, provide employee access to your payroll program – whatever. Just do it.
- Internal Handbook. Do you have policies around how your business operates? If not – you should. This is like your business bible and gives your employees instant information about how your business runs (and it saves the questions down the track). I am talking about things like a leave policy, and expense reimbursement policy, a training policy, a travel policy, an online security policy, a social media policy – the list is endless. Get your ducks in a row so employees know your internal processes.
- Plan for the worst case scenario. Now I know this sounds a bit negative, but if you plan for the worst right from the beginning, if shit does hit the fan you know exactly what to do. So plan for employees that don’t perform and how to manage their future behaviour, plan for employees that need to take unexpected leave and know their entitlements, plan for employees who question their pay rates and entitlements and understand your own calculations. You simply have not excuses not to be on top of this.
“Having employees, and having great employees can grow your business and your brand. Mis-managing those same employees, can damage your brand even quicker.”
You have made the hard decision to hire an employee so don’t ignore them, don’t assume they understand payroll and don’t assume they understand your business vision. Nobody is a mind reader.
Work out a plan to check in with your staff (especially if they work remotely), ensure your business vision and goals are clear and communicated, speak with your staff (like actually ask them straight up if they are coping, if they are happy, if they have questions or concerns) and ensure you have your obligations well and truly covered.
Having staff and running payroll is nothing to be scared of. Get the right information, get the right advice and manage those staff to build your business to be bigger and better than it already is.