7 Tips on Building a Payroll Management Strategy for Businesses

Nearly 50% of employees begin a job search after two issues with a paycheck. No matter your payment schedule, your employees want consistency (and more). Discover other helpful tactics for keeping your employees happy with a new and improved payroll management strategy.

1. Audit Your Current Payroll Management Strategy

When you explore new tactics for your payroll management strategy, it’s vital to examine current processes. If you determine preexisting gaps, you can prioritize those tactics over lesser ones. As your strategy improves, you can focus on implementing additional tactics.

A payroll process audit examines several different features. Managing payroll involves more than signing paychecks. Your audit should include:

  • Use of employee time tracking software
  • Compliance with IRS standards and tax forms
  • Scheduling employees’ work hours
  • Examine payroll, accounting, and cash documentation
  • Documented processes for payroll
  • Test plug-ins or extensions of payroll software
  • Distributed duties to HR

After auditing your payroll process, you should know what areas need the most attention. Prioritize those areas of concern, such as documentation or time-tracking. Both of these processes often create disruption in other workflows.

2. Explore an Automated Payroll Process

With your payroll process audited, you can explore automation. Some of the time-consumptive or error-prone aspects of payroll management disappeared with automation. Machine learning replaces some of the most common mistakes made in repetitive tasks like payroll.

These kinds of mistakes can result in costly fees and penalties. Even with qualified HR staff and steady payroll processes, humans make mistakes. Payroll automation is also scalable, unlike hiring more and more staff.

Using the right payroll automation software, you can begin offering direct deposit. You can also calculate taxes and draft paychecks. If you consult external payroll staff, they use payroll automation software, too.

3. Create a Payroll Calendar

Tracking payroll is an important part of any payroll management strategy. Whether you work with full-time employees and contractors on part-time, you need a calendar. In fact, the more differentiated your hires, the more you’ll benefit from this tool.

Creating a payroll calendar should be a simple, straightforward process. You want anyone who references it (yourself, HR staff, employees, or outside payroll staff) to understand it. Below are a few tips to consider when drafting your payroll calendar.

  • Create a template for easy updates and backups
  • Share copies with supervisors and managers for easy distribution
  • Display yearly, monthly, and weekly payment schedule for employee reference
  • Highlight important dates with colored fonts for reference
  • Schedule reminders for holidays and payroll timelines

A payroll calendar streamlines different workflows, allowing employees and managers easy access to vital information. Your employees will experience more satisfaction knowing when they’re paid, ahead of time.

4. Implement Payroll Training for HR

If you use external professionals for your payroll management strategy, your HR staff still needs training. There are certain payroll processes HR must understand. Often, HR manages issues that managers lack the time or knowledge to resolve.

When you implement payroll training for HR, you’ll see several benefits. These include:

  • Better collaboration between payroll and HR departments
  • A lighter workload with consolidated reporting and streamlined processes
  • Reduced friction between HR and payroll teams with clear standards and training

Even if you use external payroll staff, your HR staff needs to understand payroll management. Explore its implementation after you audit existing processes.

5. Streamline Turnover Processes

One of the most time-consuming aspects of payroll management involves employee turnover. In industries with high turnover, the paperwork takes as much time as onboarding. You can save yourself frustration and time in your payroll management strategy with new turnover processes.

  • Promote internally to decrease the training time and cost for new hires
  • Use a buddy system for payroll team members to train one another
  • Create process flowcharts and schedules to streamline payroll documentation
  • Keep updated templates accessible to every payroll employee

Staying on top of these considerations saves valuable time and money for your business. If you outsource your payroll staff, don’t hesitate to ask how they keep their turnover cost low.

6. Maintain a Transparent Payroll Policy

When you audit your payroll management strategy, make sure to examine your policy, too. Many payroll policies are created and left untouched for long stretches of time. When businesses restructure, payroll policies need auditing, too.

Your payroll policy should be transparent and accessible to employees. If they have questions for team leads or HR, the clear policy makes answering these queries easier. A transparent policy includes:

  • Payroll process details
  • Employee classification
  • Salary determination
  • Employee reporting responsibilities
  • Company procedures for payroll mistakes
  • Paid time off
  • Wage and promotion calculation

If you hire full-time employees and contractors, make sure your policies cover each type of hire. Different roles come with different policies. To build strong relationships with employees, use a transparent payroll policy.

7. Outsource Payroll Management to Qualified Staff

Depending on your business size, you may not need full-time payroll staff. The last thing you want is unreliable contractors with your payroll, either. And, in the event your business grows and needs more payroll staff, you need scalability.

Outsourcing payroll management to qualified staff can prevent all of this. Finvisor supports small business needs. Their support of emerging business means they can support your company—now and in the future. With specialized advice and operational support, your business has the flexibility and experience it needs to grow.

Learn Other Ways to Improve Your Payroll Management Strategy

With these improvements to your payroll management strategy, your business and employees benefit. These are only a few tactics you can apply to improve payroll. To discover other helpful information for managing payroll and other aspects of your business, consult the rest of our content.