Running a small business is undoubtedly tough – especially during a pandemic. While managing payroll and compliance may not be the most glamourous part of entrepreneurship, it does have an enormous impact on your business. So, for that reason, we want to share why payroll processing doesn’t have to be painful and bust 10 common myths about payroll!
Payroll Myth #1: You Need Physical Timesheets to Pay Employees
NO! Paper timesheets are as outdated as VCR’s! Only the truly “old school” legacy businesses still routinely use them. On top of that, timesheets extremely prone to errors, fraud, and difficult to map. Automated time and attendance systems (yes, like Fingercheck) streamline attendance processing, saving you valuable time, while making record keeping easy. Lastly, it’s cost effective and allows for easy integrations with payroll software (again, think Fingercheck) to reduce risk exposure.
Payroll Myth #2: There’s an Exact PTO Quota to Remember
In reality, paid time off or PTO is a flexible benefit. A number of tech companies like are doing away with formalized PTO accruals, while others offer unlimited PTO! That said, we advise you have some type of documentation in place, without making the process so difficult that employees are impacted. Oh, and yes, Fingercheck can do this!
Payroll Myth #3: Vendors Won’t Work with Small Businesses
NO! Modern vendors and payroll software providers (like Fingercheck) are ready with scalable solutions that are easily to implement. Fingercheck for example, (are you noticing the pattern yet?) can take on any number of employees, from five people-strong company to a 1000+ employee base.
Payroll Myth #4: When Using Independent Contractors, Payroll Doesn’t have to be Formalized
In today’s gig economy, small businesses are relying on the contract workers more than ever. Independent contractors still need to be paid regularly and given Form 1099, at every year-end, in addition to filing with the IRS. There are dedicated tools that can help – did we mention Fingercheck yet?
Payroll Myth #5: It’s Easier to do Payroll In-house if You’re a Small Company
Not really, but you better not make a mistake! The truth is, no matter how many employees you have, all the hoops, hurdles, and bureaucratic procedures remain the same. Every segment of your business will require attention and running payroll in-house is a recipe for errors and potential audits if not done precisely accurate, every time!
Payroll Myth #6: Hiring the Right Employees Will Simplify Concerns Around Taxation
NO WAY! Some small business owners believe selecting the right employee will limit liability caused by non-compliant payroll. Not the case! Even loyal employees are likely to report payroll violations or even leave the company if the pay is regularly delayed and that will cause major problems for any employer.
Payroll Myth #7: Companies with Less than Ten Employees Follow a Different Set of Rules
No! The federal government mandates any business, regardless of size or industry, must follow a fixed set of payroll regulations. While they vary from state to state, the main procedures are consistent. In fact, even a business with just one, single regular employee companies are required to follow a specific set of guidelines.
Payroll Myth #8: Taxation Can Be Handled by an Internal Workforce
Even when companies outsource payroll processing, the taxation process is often done in-house to save costs. As an annual process, it’s easy to not think about taxes till the end of the year; however, this puts you at high risk for non-compliance and heavy penalties. The payroll process can be linked to taxation, realigning incoming and outgoing expenses for a fast and seamless tax administration system.
It’s nearly impossible to be aware of every legal and tax change that must be addressed in order to process payroll accurately. The solution would be a dependable payroll solutions provider (yes, we’re plugging ourselves again) to help achieve that. A payroll platform (like Fingercheck) will automatically include updates from federal, state, local, and regulatory agencies to eliminate any possibility of an oversight.
Payroll Myth #9: Seasonal Hires Can Be Paid “Under the Table”
New business owners often make the mistake of not documenting seasonal hiring employees. These workers may range from family or your immediate set of friends etc. Without proper documentation you, as a business owner, lose a number of benefits! You also risk not fulfilling the minimum wage limit which may come back to haunt you in the future.
Payroll Myth #10: Outsourcing Payroll Will Inevitably Lead to Vendor Lock-in
In the very first year, any business owner will realize that it’s taking them anywhere between 6 to 12 working hours every month to complete payroll. But outsourcing means investing in a 3rd-party provider, and you’ll have to work with them for a specific period, no matter the quality of service.
Today, it’s possible to select simple, SaaS-based interfaces that allow you to outsource payroll. Fingercheck for example, offers free trials and demos so you can explore the platform before signing up for service.
As a small business owner, you’ve likely heard of all these payroll myths before. But don’t ignore compliance regulations. There are plenty of solutions out there so do your homework. But we’ve done the legwork for you! Sign up for a free trial to Fingercheck. Unlike other payroll providers, we offer one price payroll at a low, fixed monthly fee – and time and attendance are included FREE! We hope you found this article helpful and that you continue to take proper steps to strengthen your business’ foundation, with an eye on future progress.