Techniques for Payroll Services

Techniques for Payroll Services The payroll process requires employers to keep careful documentation of the hours worked by their personnel and to compensate them for services rendered. This can be one of the most demanding, time-consuming tasks a business faces. It also requires employers to ad here to all current local, state and federal mandates regarding payroll taxes, benefits and worker's compensation. There are four main ways employees can be paid (cash, check, direct deposit or debit card). Employers can do the payroll themselves or contract it out to accountants or payroll-service companies. Cash Method- Payroll Check Method- Direct Deposit Method- Debit Card Method Manual System Accountant Payroll Software Contracted Payroll Companies- Cash Method Temporary or one-time workers are commonly paid by the cash method. This method can also result in state and federal tax fines, especially if there is an understanding that the employer will not issue a federal @-1099 form at the end of the year and if the employee does not intend to pay taxes on money earned. Payroll Check Method Most companies issue all employees a payroll check at the end of each pay period, whether payroll is handled in-house or off-site. After a check is issued, the employee must take it to a bank or credit union to cash it or deposit it. The payroll check has the advantage of documenting an accrued statement of the employee's earnings, benefits, paid and unpaid days off and any deductions taken out of the his gross pay. Direct Deposit Method Some companies give employees the choice to have payroll monies deposited directly into their bank PAY CARD accounts, while others do this as a matter of policy. This method is convenient for both the employee and employer, except in the case where errors are made and an employee may have to wait a full pay period for corrections to be made. Companies issuing payroll in this manner also generally provide a paper document that shows all earnings and deductions. Debit Card Method Another take on the direct deposit method is the use of payroll debit cards. Employees are issued a debit card onto which their net pay is directly deposited each pay period. While this method is very convenient for employees, employers must first check the law to see whether this method is allowed in their state. Employers must also go through the process of setting up the system, which can be complicated and cost some initial activation fees. Manual System The manual system of recording and issuing payroll may be used by a very small business with only a few employees. This system involves the manual recording of all payroll information. It is time-consuming and requires knowledge of all local, state and federal rules and regula- tions regarding wages. Accountant Some businesses prefer to contract a certified public accountant (CPA) to do bookkeeping and manage payroll. While this method is an expenditure for the company, there is the assurance that a trained profes- sional is handling financial documentation. A CPA must have an education in accounting and be accred- ited by the state in which he works. Payroll Software There are several types of payroll software that can accu- rately document all wage information and issue accurate payroll disbursements. Payroll software can be somewhat expensive to purchase, and generally requires a one-time set-up fee, utilizing the services of a computer specialist. Be sure to hire a specialist who is familiar with the software and offers training to staff who are responsible for payroll and benefit information. Contracted Companies Payroll management can also be outsourced to a pro- fessional payroll company. These companies have the skills and knowledge to handle all a company's payroll needs, working to current local, state and federal specifications. They also provide the professional, accurate wage documentation needed when filing annual tax forms. These companies are often con- tracted for a specific time period, and the employer may be liable for the full amount of the contract fee if he opts out of the service prematurely. Source: http://smallbusiness.chron.com/techniques- payroll-services-18470.html Compiled By: http://allbusinessservices blogspot.com/ http://www.pspay.com/ 1-1 Techniques for Payroll Services The payroll process requires employers to keep careful documentation of the hours worked by their personnel and to compensate them for services rendered. This can be one of the most demanding, time-consuming tasks a business faces. It also requires employers to ad here to all current local, state and federal mandates regarding payroll taxes, benefits and worker's compensation. There are four main ways employees can be paid (cash, check, direct deposit or debit card). Employers can do the payroll themselves or contract it out to accountants or payroll-service companies. Cash Method- Payroll Check Method- Direct Deposit Method- Debit Card Method Manual System Accountant Payroll Software Contracted Payroll Companies- Cash Method Temporary or one-time workers are commonly paid by the cash method. This method can also result in state and federal tax fines, especially if there is an understanding that the employer will not issue a federal @-1099 form at the end of the year and if the employee does not intend to pay taxes on money earned. Payroll Check Method Most companies issue all employees a payroll check at the end of each pay period, whether payroll is handled in-house or off-site. After a check is issued, the employee must take it to a bank or credit union to cash it or deposit it. The payroll check has the advantage of documenting an accrued statement of the employee's earnings, benefits, paid and unpaid days off and any deductions taken out of the his gross pay. Direct Deposit Method Some companies give employees the choice to have payroll monies deposited directly into their bank PAY CARD accounts, while others do this as a matter of policy. This method is convenient for both the employee and employer, except in the case where errors are made and an employee may have to wait a full pay period for corrections to be made. Companies issuing payroll in this manner also generally provide a paper document that shows all earnings and deductions. Debit Card Method Another take on the direct deposit method is the use of payroll debit cards. Employees are issued a debit card onto which their net pay is directly deposited each pay period. While this method is very convenient for employees, employers must first check the law to see whether this method is allowed in their state. Employers must also go through the process of setting up the system, which can be complicated and cost some initial activation fees. Manual System The manual system of recording and issuing payroll may be used by a very small business with only a few employees. This system involves the manual recording of all payroll information. It is time-consuming and requires knowledge of all local, state and federal rules and regula- tions regarding wages. Accountant Some businesses prefer to contract a certified public accountant (CPA) to do bookkeeping and manage payroll. While this method is an expenditure for the company, there is the assurance that a trained profes- sional is handling financial documentation. A CPA must have an education in accounting and be accred- ited by the state in which he works. Payroll Software There are several types of payroll software that can accu- rately document all wage information and issue accurate payroll disbursements. Payroll software can be somewhat expensive to purchase, and generally requires a one-time set-up fee, utilizing the services of a computer specialist. Be sure to hire a specialist who is familiar with the software and offers training to staff who are responsible for payroll and benefit information. Contracted Companies Payroll management can also be outsourced to a pro- fessional payroll company. These companies have the skills and knowledge to handle all a company's payroll needs, working to current local, state and federal specifications. They also provide the professional, accurate wage documentation needed when filing annual tax forms. These companies are often con- tracted for a specific time period, and the employer may be liable for the full amount of the contract fee if he opts out of the service prematurely. Source: http://smallbusiness.chron.com/techniques- payroll-services-18470.html Compiled By: http://allbusinessservices blogspot.com/ http://www.pspay.com/ 1-1