There are nearly 30 million small businesses in the US with nearly 60 million employees. That number grows bigger every year — and so does the cash it takes to keep them going.
One of the biggest factors that determine a small business’s survival is its cash flow. Over 80% of failed startups go under because of money problems.
Managing your money isn’t just about how you earn it, it’s all about how you spend it, too. Paying your employees can be confusing and lead to accounting mistakes.
Don’t join the 82% of failed businesses. We’ll show you what you need to know to learn payroll and take control of your finances.
Before You Hire Someone
Before you bring someone on, figure out what your expenses will be. Do you need full-time workers or part-time workers?
Set aside money in the budget for compensation, taxes, health insurance, etc. as needed.
When and How to Pay Employees
There are lots of factors that go into setting up a payroll system that you need to consider.
Here are a few things to think about:
- How often you pay your employees? Once a week, twice a month, once a month?
- What is your overtime policy
- Do you have allowances for sick days, vacation days, and/or PTO
Building an efficient payroll system depends on a lot of moving parts. Go over your policies with a fine-tooth comb so nothing catches you off guard.
Set Up Your System
To set up your payroll system, you’ll need certain information from your employees. Then, you’ll need to set up your system to pay them out.
Have them fill out forms, like I-9 or IRS W-4, along with their applications. You’ll need their bank account information too if you’re doing direct deposit.
Set up a second bank account just for processing employee pay. Having an account separate from your business account helps you stay on top of your transactions.
Don’t be Afraid to Ask for Help
Figuring out how to do payroll yourself can be overwhelming for a small business. Do you have the time it takes to calculate employee pay, deductions, pay schedule, and then distribute the funds?
If not, don’t be afraid to ask for help. There are many affordable services that can guide you or even do payroll for you.
When you look for the best payroll service for small business, look at past clients or all of the services they offer. Trust your instincts to find one that feels like a good fit.
Learn Payroll to Succeed
While there’s a lot of details to keep track of, this guide should help you feel empowered when it comes to paying your employees. Learn payroll and knock one more thing off your small business to-do list.
Don’t join the ranks of failed startups. Take control of your small business and get your finances in order.
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