Could payroll actually be painless? Here is how you can do it.
For me, I wanted to make this process efficient and workable for my customers and myself. Inside the accounting profession, I heard things like “payroll is just something you do for clients because it’s compliance, but doesn’t add value and isn’t profitable”.
To a point, they were right. The archaic tools, tedious processes, and government are what make payroll a punching bag and a necessary evil. We can’t do much about the government, but we CAN do something about process and tools.
Experience running an outsourced accounting operation I think presents a unique perspective on this. The first thing you should do is put together a list of tasks to complete for each payrun you do. Mine looked something like this:
- Collect hours from employees
- Review timesheets
- Enter hours into payroll system
- Review benefits and deductions for each employee
- Add reimbursements if necessary
- Process Payroll
- Record Entry in Accounting System
- File Quarterly Tax Reports
- Pay Quarterly Taxes
- Respond to Inquiries from the IRS
Next, for each step, see if there is a way you can automate it. If there is, simply put an “A” next to each line on your list. For us, we were able to use software to automate steps 1, 3, 6, 7, 8, 9, and 10. That left us with three remaining manual tasks.
For each task, create a short screencast of yourself completing the work. We use Jingfor small screencasts less than 5 minutes. Then in your task/project management system, include a link to the screencast you created and write the tasks down. For us, our monthly payroll process is simply:
- Review Timesheets (already available in T-Sheets)
- Review Benefits and Deductions
- Add Reimbursements
The other tasks were all automated through software and correct setup. Completing payroll this fast after spending several hours on it in the past feels like heaven.
The tools you choose to collect, process, and file your payroll information will determine how many of your manual steps you can automate. The software we recommend for SaaS and small business is Gusto (previously Zen Payroll – personally, I like the name Zen Payroll better…), T-Sheets, and Xero.
T-Sheets can be used to track time, and Xero is our accounting software of choice. Both integrate directly with Gusto, essentially eliminating manual entry.
Using these tools cuts down our payroll processing time exponentially, and Gusto will even help you with the payroll setup if you are switching from another provider or just starting out.
So what tools do you use in your business to simplify payroll? Would love to hear your comments.