If you’re a small business, payroll is a big deal. Payroll usually means hours pouring over timesheets, manually calculating paychecks only to do it all again next week. You’re bound to make mistakes, giving the local attorney general plenty of room to whack you with penalties. It’s time-consuming and costly, two things you don’t have at your disposal. That’s where payroll automation comes in. Take your handyman business to the next level, free up time, improve accuracy, and ultimately save money. It’s a win-win for you and your employees.
What is Automated Payroll?
An automated payroll system allows you to process payroll through a computerized system. The system produces paychecks, manages benefit payments, and calculates the relevant tax requirements. It’s integrated with the business as a whole, with many using it for invoicing and accounting purposes. Whether it’s calculating wages, drawing up employment contracts, or monitoring annual holidays and employee deductions, automated payroll facilitates it all.
Time is Money
When you’re a small business, you need every element of your process to run as efficiently as possible. Your time is valuable, and to maximize that value, you have to streamline, delegate and automate wherever possible. It’s all too easy to get caught up in manual must-do admin, taking you away from the more strategic issues at hand.
Payroll is at the center of the relationship between your handyman business and your employees. Your workers rely on receiving the proper pay, and when errors occur, a sense of distrust and frustration inevitably starts to surface. In some cases, it may cause employees to lose motivation, eventually leaving the business altogether. At that point, you’ll have to spend resources on recruiting, onboarding, and training a new employee. All of which takes time and, therefore, money.
Payroll errors can also cause additional unexpected expenses. It could trigger lawsuits from the state attorney general or local attorneys, which would seriously hinder your growth. If you’re producing incorrect financial reports, you’ll need to spend valuable time getting to the root of the issue.
In essence, payroll is a task with no room for error, and it’s near impossible to eliminate this if you’re tackling it manually. Human error is something you can’t afford. Luckily, automation is perfect for repetitive tasks, bringing some much-needed consistency and accuracy.
6 Benefits of Automated Payroll for Your Handyman Business
1. Overcome business challenges
According to the 2021 Small Business Trends report, small business owners focusing on positive changes for the coming year will be investing in third-party software to help manage payroll, accounting, and inventory. Automation plays an influential role in combating some of the common challenges experienced by business owners.
In 2020, 11% of small business owners cited managing payroll as a top challenge, while 13% cited time management. Recruiting and retention were a significant challenge for 16%. With the integration of automated payroll, small business owners can easily overcome these challenges. Most payroll services offer human resource integration, killing two birds with one stone.
2. Keep your company agile
2020 was an incredibly unpredictable year for businesses around the world. The U.S. economy faced unprecedented changes, putting enormous pressure on small business owners. The COVID-19 pandemic has certainly pushed enterprises to adapt, adjust their strategy, pivot their offering, and embrace change.
While a global pandemic is an extreme case, change is always going to be inevitable. To be nimble, you need to have a solid foundation. Regular processes like payroll and employee management need to tick over like clockwork. If you’re still struggling to get the basics right, adapting to unpredictable changes could be troublesome.
Automated payroll minimizes disruption, meaning one aspect of your business will continue to function as it should. Whether you’re rapidly adding employees or contractors to deal with a boom in industry or reducing your staff count, an automated service makes this a breeze. Don’t let the basics stop you from advancing.
3. Create consolidated reports
Automated payroll allows you to access payroll data and analytics with ease. All the information you need is a few clicks away. If you’re still processing it all manually, it’s probably documented on various Excel spreadsheets and folders on your computer, making it time-consuming to put together an accurate report.
Automated systems let you download pre-configured reports allowing you to look at your labor cost by project, client, or month, showcasing the impact on your overall profitability. You’ll be able to make informed decisions about your business, removing that uneasy element of surprise when things don’t add up.
Most cloud-based payroll management systems include the following reports:
- Reconciliations reports
- Ad-hoc and user-defined reports
- Customizable payroll statements
- Professional Tax reports
- Management Information System reports
4. Manage and streamline rules and regulations
Payroll rules and regulations can be complicated. It’s a lot to wrap your head around. Most states require workers’ compensation insurance, along with social security, medicare, and state unemployment insurance. You’ll need to be compliant with the Federal Insurance Contributions Act (FICA) to protect your business from government fines. Some payroll systems can calculate and file all the relevant payroll taxes with government agencies on your behalf. It’s worth looking into.
You’ll also need to be on top of your employee benefits. Your handyman business may have a few permanent members who receive health benefits. If you’re covering their 401(k) plan, it needs to be seamless; mistakes will cost you. You need to deposit your employee’s salary deferral into their account within seven days of payroll. If this is late, you may face an audit from the Internal Revenue Service (IRS). An automated payroll solution that connects with your benefits system directly removes this stress and anxiety, ensuring everything is compliant and above board. Errors in this area are costly. It’s not a risk worth taking.
Automated payroll will also help you manage policies and procedures that your employees need to follow. Whether it’s safety regulations, paid time off, or a drug and alcohol policy, you can house it in the system. It’s a great way to reduce company risk, protecting you and your employees.
5. Provide employee autonomy
Most automated payroll systems offer a self-service element for employees. It allows them to view their paychecks and update personal information with ease. By removing tasks like updating bank details from your payroll to-do list, you’re reducing the margin for error. On top of that, employees can view and print their pay stubs, see their deductions, and access W-2 and 1099 forms without having to bother you.
6. Store records
The Fair Labor Standards Act requires employers to keep three years’ worth of pay records. In these records, you need to include hours worked, payment rates, and payroll dates. An automated payroll system will store this all in one place, keeping your records organized in the cloud so you never have to worry about losing important information. If you’re managing this manually, you may run into trouble keeping track over the years.
Automating your payroll is the ultimate quick-win. It can save you valuable time, allowing you to focus on other tasks while ensuring your business operates by the book. Payroll mistakes could haunt you forever, hindering the growth of your handyman business. The benefits of automated payroll far outweigh the cost. Eliminate those tedious, time-consuming tasks associated with manual payroll and take your business to new heights. You (and your employees) will never look back.