The final quarter of the year is fast approaching, meaning you’re likely already setting business goals for 2018. And the end of the year is also ideal for evaluating any systems or vendor solutions you have in place to determine whether or not they’ve helped your business reach its 2017 goals.
As your business prepares for 2018, now is a better time than ever to evaluate your payroll system and decide if it’s time to make the switch to a new provider. Below, we’ve outlined several key benefits of transitioning to a new payroll system effective January 1.
Start the New Tax Year with an Automated Payroll System
By running your last payroll of 2017 on your previous payroll system and the first payroll of 2018 on your new system, you can make a clean switch to kick off the new tax year. With the new year, all payroll and other talent management-related numbers are reset, meaning you won’t have to go through the process of balancing payrolls from your old system year-to-date. But make sure you maintain a record of all payroll information from your previous provider before ending the relationship, in case you need to access the information in the future.
When it comes time to file 2018 taxes, pulling payroll records from one system will make the task easier on all parties involved, and ensure greater accuracy. And payroll accuracy is key to saving your business from costly fines, as approximately one-third of businesses face IRS penalties each year due to payroll errors. The right payroll provider will help you pay all employees with complete accuracy, and provide the necessary tools to maintain tax compliance, despite ever-changing compliance regulations.
Centralize Your Payroll and Talent Management
Are you aware of how many total systems your business uses for HR processes? Many businesses use different systems for onboarding, taxes, benefits administration, hourly time tracking and time off tracking, among other HR processes. If this sounds similar to how your business currently runs, you should make it a New Year’s resolution to get organized and cut back on the total number of systems you use for payroll and talent management.
Look for an integrated hiring talent management system that enables you to manage not only payroll, but all other talent management-related processes in one centralized platform. In the long run, this will save your business administrative time and money, and enable employees to access all necessary information – such as tax forms and pay stubs – in one place.
Cut Back on Annual Payroll System Fees
A significant cost associated with most payroll systems is extra payroll fees that add up throughout the year. Most payroll providers charge per payroll run, for example. If your business runs payroll for certain roles every week, other roles twice a month, and once a month for sales commissions, you’ll face additional charges each time you process payroll. Other payroll providers have added charges for reporting and end-of-year tax forms.
To avoid such fees, partner with a payroll system that has a transparent cost per employee per month payment structure. This can ensure you don’t get nickel and dimed for each payroll run or other necessities, such as tax forms. The budget typically lost to various payroll fees can then be re-allocated to other areas of the business to help you continue to grow throughout 2018.
Track Paid Time Off Starting January 1
Does your current payroll provider track paid time off? If your business tracks paid time off manually, it can be costly and time consuming – and you may not realize when an employee is approaching his or her time off limit for the year. By switching payroll providers and leveraging an integrated payroll and talent management system starting in the new year, you can get notified each time an employee approaches his or her paid time off limit – ensuring your business doesn’t lose money due to employees taking too much time off. Automated tracking and notifications can also help your business support a compliant PTO policy.
Manage Yearly Overtime Costs
If you don’t have a process in place to track overtime, by the end of the year, excessive overtime costs can cause your business profitability to take a hit. By running your payroll through an integrated talent management system, managers and business owners can receive notifications each time an employee is approaching 40 hours, to prevent costly overtime. While workload calls for overtime on occasion, you don’t want to end up paying far more in overtime costs than what’s absolutely necessary. This simple change can save your business thousands of dollars throughout the year.
Payroll-related costs can account for up to 50% of total business expenses, so it’s critical to ensure you’re paying employees – and tracking other talent management costs – as accurately and efficiently as possible. For more information on choosing the right payroll provider, download our eBook, “Unifying Your Hiring and Talent Management Systems.”