Payroll processing is among the most essential yet difficult business processes. Every business, regardless of size or industry, has one feature: they all have to process payroll for their staff. Gathering employee time information and managing pay are typical steps in payroll processing. Most businesses process payroll using a payroll software system. Others opt for a third-party payroll processing service. Here is more information about payroll processing and what you need to know.
What exactly is payroll processing?
Payroll is the payment that a company must pay its employees for a set period or on a specific date. It is under a company’s accounting or human resources department. But, payroll in small businesses may be under the business owner or an associate.
The act of managing employee payments is payroll processing. It covers everything from entering employees into your payroll software to paying them. You’re probably the one in charge of payroll if you run a small business. But, when your team grows, payroll becomes more time-consuming. Thus, you may need to delegate this responsibility to an accountant or HR manager.
Payroll accounting software aids in organization and ensures payroll compliance with federal laws. Besides, when processing payroll, there are many taxes to consider so professional help can help you.
Payroll processing entails:
- calculating employee wages
- withholding taxes
- tracking employees’ working hours
Looking for professional help in Denver, CO, to ensure compliance is crucial. Besides, errors in processing and executing salaries may harm employee morale and productivity. Thus, while ensuring accurate and timely calculations, adhere to statutory compliances.
How long does payroll processing take?
Payroll processing can take several hours, depending on the number of employees and tools you have. The more manual the process, the more time it takes. Automated payroll and time-tracking tools can reduce that time. Besides, most payroll processing solutions calculate payroll taxes for you, which can take hours to do if you do it manually.
The amount of time it takes for your checks to arrive in your account after you submit the type of deposit determines payroll. For example, some payroll providers provide same-day or next-day direct deposits. However, it takes two to three days.
Is payroll a part of human resources or accounting?
While payroll is accounting, it deals with paying employees within a company, so it falls under the HR department. As a result, most businesses have HR handle payroll and related issues. But, some businesses may house payroll within the finance or accounting department. Similarly, some larger businesses may even set up a separate payroll office.
Payroll processing is time-consuming and complex. It requires strict adherence to federal and state rules and regulations. Besides, it requires precise record-keeping and close attention to detail. Working with a software supplier to automate those stages can assist you in developing an efficient payroll process.