If you run a small business and manage payroll obligations with spreadsheets and paper slips, you’re far from alone. But with affordable, advanced alternatives and new payroll laws around the corner, the old way of doing things is fast becoming unsustainable.Paying for things can hurt.
Even when it’s for goods or services that add value to your offering, when it comes time to fork out, things can get a little tense.
The situation is made worse when the act of paying is burdensome. If time is money, then you’re paying more for the privilege of paying your dues.
This is the problem with managing and processing payroll. You’re a good boss and you want to keep staff happy, but even the act of remunerating them can feel like a lot of work for little reward.
If you’re running a small business with 19 or less employees, there’s a chance you’re still managing your payroll via spreadsheets or even on paper. And while this may feel like a low-cost (but not pain-free) solution, the fact is that it’s costing your business much more than you think.
Here are three reasons why.
When you onboard new employees you need to provide a form, capture the relevant details and begin recording their hours.
But that’s just the start of this never-ending story. After that it’s an interminable, cyclical process of reconciling various accounts, reporting and preparing payment summaries.
All of this takes time and, when done manually, creates huge opportunities to make errors that will cost you even more time and money should they occur.
And errors do occur. Payment disputes are consistently making headlines, resulting in severe reputational damage for the business owners involved.
Currently waiting to be brought before the Australian Senate*, new payroll laws will require business owners to be reporting their payroll activity to the government not once a year, but every time a pay run is processed.
That’s right, that interminable, cyclical process is about to crank up a gear, thanks to Single Touch Payroll (STP).
Why is this happening? Well the ATO says getting up to speed with STP will make payroll easier. A critical eye for subtext might come to the conclusion that they actually want to stamp out the kind of mistakes and abuse of the current system that results in the sort of payment disputes mentioned previously.
So you can thank dodgy, outdated payroll processes for the need to create this new legislation.
Look forward to adjusting your bookkeeping processes to align with STP in the coming months if you’ve not done so already. Assuming STP passes (and all signs are pointing to it), you’ll be expected to begin acting on it as of 1 July this year.
If you’re currently using an online accounting software for your bookkeeping requirements, then you already know that well-designed tech solutions can save you a lot of time and hassle.
And it’s not a huge leap to take this approach with payroll.
Not only do new payroll solutions allow you to do away with most of your time-consuming processes and resolve any issues you may have with STP, they’re soon to be more affordable than ever, beginning at around $10 for businesses with four employees or less.
So while you may think you’re saving some money without payroll software, it could in fact be the most costly mistake you’re making.
*STP is now mandatory for all businesses, with micro-businesses (of four employees or less) now being required to start reporting STP by 1 July this year.