Typically, newly launched startups have a lot on their mind apart from how to do payroll. The smallest details on how to reach a break-even point in sales or to make profit are also crucial. When thinking about all of this, payroll can be a real hassle. What some people find more important than how to handle payroll for small businesses is hiring the right talent for their business. But the point they’re missing is that they’re going to have to pay these people. Before you continue with internal hiring, it’s important to set a payroll process in place. It’s going to make handling payroll much easier as you grow.
There are multiple methods a small business can run their payroll. To make it easier to decide what suits you best, here’s a detailed list of all the different ways you could approach payroll:
For a business of less than 10 people, payroll isn’t that big an issue. You can manually calculate the salary slabs and taxes, assuming you know everything you need to deduct. Whether you’re deducting PF or leaves, getting the accurate amount to be deducted every time is critical. Wrongly subtracting an amount could lead to some serious issues. But everything you need to know about how to do payroll has been made available online, through blogs or youtube videos, all you need to do is look for the right one.
When calculating manually, using a calculator or an excel sheet, you have total control over everything that goes on. This also means that you are the only one held responsible for any errors that occur. One of the main disadvantages of handling payroll yourself is the liability that comes with it. Computing the salary payable using a calculator could lead to numerous errors if not done with attention to details. You could be knowing the entire process of how to do payroll and all the deductions to be made, but one incorrectly entered amount can change the end result completely.
With the advantage being complete control, there are also drawbacks. Being a busy professional running a business, processing payroll by oneself can be extremely time-consuming. What could be done in one day with a software, would take a few days of the month, just to calculate and process every employee’s payroll.
Hiring an accountant would only mean delegating all responsibilities from yourself onto them. They would understand your business and the process, and would know how to do payroll accordingly. However, they would come at a cost with a same possibility of human error. The process would probably still be slow as they’d be running it themselves. As there is not a lot of difference except for delegation between manually running payroll or hiring an accountant, it’s better to choose an online payroll services for small business.
An end-to-end payroll processing software is beneficial for the biggest of MNCs and the smallest of businesses. The only issue here could be finding the best payroll software for small business. A payroll software would take care of the minute details and save you the awkwardness of going back to your high school math experience.
Just like handling payroll manually, you would still be in control of the process with online payroll services for small businesses. Payroll software come with the option of calculating all the leaves taken by an employee, adjust them with their leave balance, and deduct the rest based on their salary. You can quit worrying about staying updated with the latest government policies or income tax deductions, the software will automatically update everything. Based on the employee’s CTC, payroll software will also calculate the estimated TDS and income tax to be paid. Payroll software also come preset with profession tax regulations as per every state’s policy.
Opting for a payroll software would save an enormous amount of time every month. With only a few clicks, you can process payroll for the entire organization. Compared to the pros, there are little to no cons. The only issue here could be the initial couple of days you spend getting used to the software and learning how to use it. But with a simple software, this process can be reduced down to an hour or so. It’s an effortless task to figure out how to handle payroll software for small business yourself. It may sound like such a service would come at a high cost. But you’d be surprised to find that they actually come at a very affordable cost. With only the learning curve being an issue, taking up only a couple of hours, a payroll software is the best method of payroll management for small businesses.