In any business, it is very crucial to manage your payroll since it involves calculating and issuing the right amount of employees’ wages at the right time. The amount of time which it will take you may depend on some factors like work load or the tools that are available.
Also provided below is a guide that would help you determine the amount of time it can take to establish your payroll system.
1. How to Select the best Payroll System
The first type is how to decide on the proper payroll system to implement when creating payroll. There are, of course, several choices available that range from simple payroll calculations done on a spreadsheet to complicated payroll processing software.
When you want to go for payroll software solutions, the good news is that you’ll be able to set up your system a lot faster than you would have done if you used manual methods. Most of the software developers of payroll software are willing to provide guides on how to set them up and contacts for support.
2. Gathering Employee Information
To process payroll you need to ensure that you have all the information on your employees. These are; Social Security numbers, tax deductions and exemptions, as well as accounts details for deposits through electronic transfer.
It may take some time to gather and to ensure the validity of the data which are presented below. However, if you already have your employee data put in the right order, then, this would only take you a few hours or less to come up with the solution.
3. Setting Up Payroll Parameters
Payroll parameters are the next step as soon as you get your choice of the payroll system and employee information. This includes entering rates of pay, defining pay cycles, and establishing other conditions such as tax and other allowances and deductions.
If you are using payroll software, this setup often can be done very rapidly with the help of some automatic tools and self-generating forms. The setup time can take a few hours and can stretch up to a day depending on the amount of segregation of duties in the company’s payroll system.
4. Running Test Payrolls
In order not to misstep in the preparation of your first formal payroll, you can process test payrolls. This assists to guarantee that the payroll system in your business is well configured and also the best way to do the estimations.
Trial payrolls are commonly used and usually they do not take more than several hours to complete enabling you to identify some mistakes or inaccuracies before releasing real payrolls.
5. Going Live
Once the setups and the test runs are over, it is time for the first real payroll run. The amount of time required to go live will depend on the level of preparation, if your payroll system is integrated with your accounting and banking system. Everything being said and done, processing of the payroll does not take more than a few hours.
In summing up the topic of the article let me reiterate that the establishment of your payroll should not take too long, especially if you followed a prudent approach by using the right tools for the job.
As with choosing a payroll system, to test payrolls, you can usually have your payroll up and running in 24-48 hours. Effective pay for employees should be accomplished in less time with minimal delays hence optimizing time since you are able to dedicate time to other operations of the company.
