7 Common Payroll Mistakes – And How To Avoid Them
You work, you get paid, that’s how it goes. But that process, better known as payroll, is made up of many moving parts, that if even one minor detail is overlooked, it could spell big trouble. From filing all necessary government forms to paying taxes on time, payroll can be challenging. But Fingercheck has a solution! So, here are the most common payroll mistakes to be aware of and how to avoid them!
PAYROLL MISTAKE #1 – MISSING DEADLINES
It is important to mark your payroll calendar and report and deposit and payroll taxes to federal and state agencies on time. Late deposits can result in hefty penalties and interest charges.
How to Fix It: Automating your payroll allows you to never miss a payday and lets you set pau schedules ahead of time so your payroll taxes are always on time so you avoid late payment penalties that add to big bucks and strain your already heavy workload.
PAYROLL MISTAKE #2 – NEGLECTING TO SEND 1099s
Independent contractors who receive $600 or more in compensation during a given year are supposed to receive a 1099 form by January 31st of the following year. companies often neglect and forget to send these out in a timely manner.
How to Fix It: Here again, automation comes to the rescue! You easily set up notifications and alerts within our automated dashboard to remind you of important dates for sending your 1099’s out on time and avoid penalties!
PAYROLL MISTAKE #3 – POOR RECORD KEEPING & DATA ENTRY
Mismatched names and social security numbers is so common that the Social Security Administration set up a special telephone # to verify them. Every year, sloppy record-keeping and data entry mistakes, cost companies millions of dollars in both overpayments and government penalties.
How to Fix It: The Fingercheck self-onboarding features lets new hires enter their personal information, so you don’t have any data entry whatsoever). This ensures employee data to be accurate. you simply enter all important records and data such as SSN# one time and save them securely on the cloud for easy, anytime access. Furthermore, our software is integrated with our Time & Attendance platform for all work hour records are neatly organized and always accurate. Now that’s an All-in-One solution!
PAYROLL MISTAKE #4 – MISHANDLING GARNISHMENTS, LEVIES, OR CHILD SUPPORT.
Employees who owe money by way of a court order to other parties means that whoever is handling payroll is responsible for sending these payments to the appropriate recipient. Any minor error made in this instance, causes a nightmarish, time-consuming predicament to correct.
How to Fix It: Once garnishments and other levies are provided by the Government, it can be easily entered into your employee’s record. Fingercheck can also provide assistance with this to ensure all is properly entered; avoiding any risk of error.
PAYROLL MISTAKE #5 – MISCALCULATING OVERTIME PAY
Specific guidelines must be followed when determining overtime pay and miscalculations can be costly. Employee litigation has been a rising trend recent years where workers have claimed to be misclassified and treated as “exempt” employees and therefore not entitled to overtime.
How to Fix It: When tracking work hours through our time and attendance platform all hours (including overtime) are recorded and collected on organized time sheets that make calculating hours simple. Our integrated, All-in-One platform unifies time tracking and payroll so everything is connected and nothing is ever missed.
PAYROLL MISTAKE #6 – NOT MAINTAINING CONFIDENTIALITY
Payroll information should never be disclosed to anyone outside of the payroll department or the upper management. It’s important that such confidentiality be maintained and that payroll is handled in a secure environment. When it isn’t employees are open to identity theft and more.
How to Fix It: All your sensitive employee data records are stored safely and backed up in the cloud where only your admin (and those you assign access) can view it. Never again worry about data getting lost or misplaced.
PAYROLL MISTAKE #7 – NOT HAVING ADEQUATE BACKUP
Should your HR manager or the individual responsible for payroll be on vacation or out sick, the IRS and the state still require to receive payments on time as do employees waiting for paychecks. You should have more than one person capable of both understanding and handling the payroll functions of your organization if and when this instance arises. In addition, if the computer is “down” for whatever reason, you need to have a manual backup system for handling all payroll functions.
How to Fix It: Using the Fingercheck platform, admins can assign one, two or more, additional admins in the event the main point of contact is not available. Admin(s) can assign and revoke permissions to anyone, at any time, even from their mobile phone – so you’re always covered.
IMPORTANT: If you believe you’re susceptible to making any of the mistakes mentioned or have done so in the past (GASP!), contact us. We’ll walk you through the simple process of customizing a streamlined process for your Payroll, HR and/or Time Tracking needs.
Thanks for reading!