Options for Managing Payroll

QuickBooks provides all of the tools you need to gather employee information, calculate payroll, and process payments. Once you set up the payroll functionality, you’ll find that QuickBooks saves you hours of time.

Now that you’ve started using the software, it’s a great time to take advantage of the QuickBooks payroll features. You need to decide how much of the process you’ll perform yourself, and the amount of work you might delegate to an outside payroll expert. Consider hiring an accountant, to help you make an informed decision.

Here are some options for managing small business payroll.

Payroll Processing Steps
To determine how you will manage payroll, consider the steps a small business must take to complete the process. Assume, for example, that you’re just hired Sally as a new employee.

• Collect information: You need to collect data from Sally, including her Social Security number, tax withholding preferences and other information. You must document her gross pay and the benefits she is eligible to receive. All of the data must be filed securely.
• Calculating net pay: Each payroll period, you need a system that takes Sally’s gross pay and subtracts her tax withholdings (federal and state), and deducts amounts related to company benefits, such as Sally’s contribution into a retirement plan. Gross pay, less all of the deductions, equals the net pay for an employee.
• Payments: You need a process to pay each worker, and those payments may be electronic or by check, depending on the employee’s preference.
• Reporting and other payments: Finally, you must file reports and send payments to each entity that required a withholding amount. In addition to the IRS and the state department of revenue, you must send a report and payments to your retirement plan administrator.

This process repeats each payroll period, and it’s important to set up an efficient process now, as you’re starting to use QuickBooks. Your firm may add or remove employees over time, and a particular worker’s gross pay, tax withholdings, and benefit preferences may change.

QuickBooks can keep your payroll process on track as your business grows, but you need to decide on a system that works for your company. Ask an accountant for help with that decision.

ADVERTISEMENT

Payroll Choices
Many companies start using QuickBooks when they are solo practitioners or manage a company with just a few employees. A number of businesses account for payroll using Excel, then input data into QuickBooks when they purchase the software.

• Manual input: If your business is small, you may decide to calculate net pay, and the other calculations yourself, and enter that data into QuickBooks. If you’re organized and willing to invest the time, this strategy can work in the short term.
• Sending data, outsourcing calculations: As your business grows, manual input may no longer be practical. You can set up a system to outsource the employee data storage and net pay calculations. QuickBooks can provide this service, and send you the net pay amounts so that you can pay your staff.
• Bank interface, tax reporting: Finally, QuickBooks can help you manage the entire payroll process. In addition to data processing and calculations, the software can provide an interface to bank accounts, so that you can pay workers electronically. You can also outsource the process of tax and benefit reporting, and the task of submitting payments to third parties, like the IRS.

Speak with an accountant, who can help you determine which system is right for you.

Getting Payroll Right
The accuracy of your payroll records and payments is vitally important. Payroll errors impact your employees, and you may incur fees and penalties to make the necessary corrections. Keep your business on track by speaking with an accountant, and get help with this important process.


If you have an accountant, invite them to log in to your QuickBooks account to advise you. If you don’t already have one, start your search with the QuickBooks Find-a-ProAdvisor site, which can help you find a qualified professional that’s right for your business.


Source: https://wordpress.intuit.com

Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa works with small business owners and entrepreneurs to assist them with financial management and creating organized systems and procedures. She specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.

Join BMFMS on Social Media