Managing payroll and expenses
There are many tasks involved in the everyday running of a business and money is usually at the forefront of most activities. Although many go into business to make as much money as possible, businesses are required to pay out of cash sums.
Managing expenses and bill paying of the business is always trick as there is a lot to monitor, and especially in a time of economic downturn. It is important to have a well thought out system in place which allows you to juggle payments and keep track of every penny that is leaving the business.
The best way to manage your business expenses and bill payment is to,
- Make entries into your accounts system as an invoice of each bill that needs to be paid
- Keep an up to date list of creditors
- Establish a monthly routine for payment of bills
Make sure that you have accounted for all business expenditure by completing a bank reconciliation
Another form of expenses that many companies find more difficult to manage is Payroll. Payroll is one of the most crucial areas in regulating a business. It's not only about paying money but also about business ethics and responsibility of an employer.
Outsourcing the payroll system is always an easy and open option for few businesses. However the principal employer or sometimes the key members prefer to take charge of the payroll system themselves. Here are some helpful topics in managing payroll for your business.
Setting Salary Structure
Every company should have a salary structure. This structure is the gross salary separated into components such as basic, house rent allowance, conveyance allowance, medical allowance, etc. As each country has a different taxation system, salary structure needs to be framed accordingly.
Leave Calculations made simple
Prior decision on holidays and leave from work can help the employer to calculate the leave of the employees. When an employee takes leave that is not applicable to them, the employer can directly deduct the pay for that time. Maintaining a log of attendance can help the employer to calculate the workdays and for the same.
Understanding legal obligations
Legal obligations from an employer differ as per the nations labor law framework. Employee insurance, provident fund savings, old age pension, are some of the legal obligations on the employers.
Managing variable and reimbursement components
The variable components should always be kept separate and the calculations should be based on actual expenses. Travel or telephone expenses are normally taken as reimbursement components.
Timely Tax Calculations
The best way to solve the employee taxation problem is to set the salary structures accordingly. This is simply done by separating the taxable salary slabs and non-taxable salary slabs and making the calculations and provisions timely. Timeliness is the key to solve the severity of the problem.
Easy full and final settlement
Mutually agreed notice periods for resignations, payment in lieu and parameters calculating pending leaves at the time of separation should be planned at a very initial stage.
Taking online support
There are several forums on the internet that can help with employer query-solving. This will help an employer to solve the problem upfront and also become a consultant for others.
Finding and customizing software
A more tedious job that comes with payroll is selecting the right payroll software system for your business. Having a payroll software can help solve crucial problems in the long run. When selecting payroll software you will want to take into consideration, compatibility, features, reliability, cost, future requirements.
By managing your business expenses and payroll will help your company to a steady balance of cash flow and keep your company running smoothly.