Every medical practice with employees uses payroll, but that doesn’t mean the process is easy. It requires immense attention to detail, awareness of various tax rates, and eats into the time you could be spending treating patients. All in all, payroll can feel more like a hassle than a celebration of your success.
Payroll should be a happy day, though. It means your business is doing well enough to reward the employees who are helping you grow. To help turn payday from frustrating to fancy-free, I’ve compiled a few tips in this blog. It includes three easy ways you can make payroll easier for yourself and more streamlined for your business.
Why Is Payroll So Frustrating?
Payroll is complicated. Plain and simple. And for many private practice owners, one more complex can be the straw that breaks the camel’s back. Figuring out how much taxes to withhold or what benefits to take from paychecks can take hours, and then you still have to run payroll. It can take significant time and energy that you’d rather put into your practice.
Additionally, entrepreneurs are hard-working individuals. If you opened your own business, you likely worked hard to gain your client base and get everything off the ground. When you hire employees, you want to see that same drive or else it might feel like you’re investing hard-earned profits unwisely.
There’s a two-fold solution to these pain points:
- Hire employees who can support your business goals.
- Streamline your payroll process.
Employees who support your business goals are those that are willing to work hard and share your values and passion for the practice’s mission—helping patients heal. When you have a team dedicated to your success, payroll turns into the best time of the month. You can see the profitability of your business and reward the employees who helped you get there.
Streamlining payroll can mean anything from how you manage your business accounts to what systems help you do the work. There are a number of different ways you can make payroll a simpler, easier process. Let’s take a look at three top tips.
How to Make Payroll Easier
If you still operate as a sole proprietorship or a single-entity LLC, you might not think you need to worry about payroll. You can pay yourself when you need it and figure out the taxes on your year-end return, right?
Wrong.
Payroll becomes necessary as you grow and add employees to your business, but it’s also valuable when it’s just you. It provides a systematic way to transfer money consistently from your business to personal accounts and can even offer certain tax breaks for different types of businesses. It shows your business is reliably turning a profit and can reduce financial stress at home by providing stable income.
To make payroll easy to manage for a staff of any size, consider these three tips.
Outsource
The simplest way to make payroll easier is to have someone else do it. Hiring a professional payroll service can not only give back the time you’d spend figuring out paychecks but also ensure things are done properly. Mistakes in payroll can quickly lead to legal issues, so it’s best practice to outsource the task to someone who specializes in doing it well.
Keep a Single Payroll Account
Having a separate payroll account helps to mitigate the impact of payroll expenses and stabilize your operating accounts by sparing them the hit of a major withdrawal each payday. You can deposit into this account during the month and pay your employees directly from it, which makes it easy to track who was paid and when.
A single payroll account also acts as a success metric for your business. You can see how frequently you’re transferring money and in what amounts, as well as how often you’re hitting your payroll targets. If you’re struggling to make payroll each month, then you might need to address your profit margins or sales techniques. If you’re exceeding your goal each month, then it’s a reliable growth indicator.
As your business grows, continue amassing funds in your payroll account. The goal should be to have funds that cover multiple payroll cycles in your account. This gives you the peace of mind that your staff will always be compensated for their hard work, even if business slows down or something unforeseen happens.
Less Is More
Less is more when it comes to payroll cycles, especially if you’re running it yourself. Payroll takes a significant amount of time, so you want to reduce the number of cycles you have to manage each month.
Paying staff once a month would be the ideal approach, as it would save the most time. But few employees can sufficiently budget a single paycheck each month. That’s why the most popular pay schedule is every other week. For the majority of the year this means twice a month, except for two months. Identify those months at the start of the year so you can plan to have a higher balance in your payroll account to cover the extra paycheck.
These three tips should help simplify payroll each month and make it easier to track your growth.
Tips and Reminders for Making Payroll Easier
There’s always more you can do to make payroll a little easier, especially when it comes down to the small stuff. The first thing is to know your taxes. There are a few different tax requirements for business owners and employees that can affect wages and should be included in each payroll.
The second thing is to choose a software that meets your needs and matches your business size. At Every Single Bean, we use Gusto. It’s an affordable platform for small businesses that’s easy to use and can factor in everything from paychecks to benefits. Another software that’s great for small practices is SurePayroll, which is owned by Paychex. Larger companies with bigger budgets would benefit from springing for the major payroll softwares from either ADP or Paychex because of their advanced capabilities.
Although Quickbooks can be a great tool for bookkeeping, it shouldn’t be used as your one-stop resource. Plenty of issues can occur if Quickbooks payroll isn’t managed properly, which can create more of a headache for you. Instead, we recommend choosing a software specifically for payroll and linking that to your payroll account. This keeps things streamlined, organized, and creates more reliability.
It Pays to Make Payroll Easier
When you can streamline your payroll processes, you get the time you’d lost, the money you need, and the peace of mind you’ve been hoping for. Whether you outsource payroll to professionals or do it yourself with specific software, the tips in this blog can help make payroll easier every time.
Every Single Bean might not be a payroll service, but we can help you manage the processes that support paying your employees. We offer bookkeeping and CFO services to make sure your business is continually growing. Schedule a call with us today to see how we can help you succeed!