Small business owners are bold people. They see the opportunity to build something new and jump in with gusto.
So, it’s understandable that they don’t live for managing humdrum back-office tasks like time tracking, tax filing or payroll management.
But when it comes to these complicated, important tasks, what you don’t know could hurt you. Let’s discuss three management myths that might be costing your small business big.
Myth 1: Using payroll software is too expensive
Maybe you’ve heard that small businesses can get by just fine without technology. Roll up your sleeves and sharpen a fresh pencil to achieve the same result, right?
Unfortunately, untrue. Manual processes don’t scale as your business grows, and almost always end up costing more money than small business payroll software over time.
Consider the paperwork. When schedules, pay stubs (showing employees their take-home pay after federal taxes, health insurance deductions, etc.) and time-off balances are only available on paper, owners and managers become gatekeepers.
It’s an unwelcome distraction for management and a source of frustration for employees. Don’t forget, costs don’t just have to be monetary. This myth could be costing you time, employee morale or other resources you value.
One way to make it better for everyone is choosing a payroll provider that offers employee self-service — meaning your people have access to, and responsibility for, their own requests and information.
Everyone runs their lives from their phones…a fact we’re sure is irritating after the fifth reminder to your staff to stop watching TikToks or carrying on lengthy text conversations during shifts.
So why not empower your employees by giving them access to their own data? They can review their PTO, benefits administration, direct deposit paystubs and more via a user-friendly online portal. It will save you time and they’ll appreciate the freedom.
A study by the American Payroll Association brings some hard facts into the decision to outsource payroll processing. They found that companies using a technology solution for payroll and timekeeping experienced a payroll error rate of 2% or less. In contrast, an error rate of up to 8% has been found in organizations manually tracking hours.
If you’re still doing payroll without support, you could be leaving your business open to errors. Even the most detail-oriented person can make a mistake when transferring information from one document to another, accidentally causing a miscalculation in payroll or tax withholdings.
Consider a payroll provider that gives you the freedom to run payroll on your own terms. When you do need outside input, it should be easy to call or email your dedicated payroll specialist for on-the-spot customer support.
Data matters, too. When you have 24/7 access to customizable payroll reports, you can feel confident about where you are now and what business decisions you want to make next.
Myth 2: Compliance rules are optional for small businesses
There are a lot of hoops for small businesses to jump through for basic legal and financial compliance. Keeping track of them all and doing the mundane tasks with precision is a drag and not something any business owner looks forward to.
Some hate it so much they make the risky decision to just ignore their obligations. They think they are too small to be concerned about following employment laws. In reality, small businesses are just as obligated as larger organizations to abide by employment and labor laws; there’s no rule stating small businesses are entitled to leniency if they violate the law.
According to the U.S. Department of Labor, “willful violations may be prosecuted criminally and the violator fined up to $10,000. A second conviction may result in imprisonment. Employers who willfully or repeatedly violate the minimum wage or overtime pay requirements are subject to a civil money penalty of up to $1,000 for each violation.”
And those are just the penalties associated with wage-and-hour law noncompliance. They don’t include penalties or damages for discrimination, retaliation and more.
All it takes is one disgruntled employee or observant customer to get you in trouble. Is it really worth the risk?
It’s worth considering a full-service payroll solution. The right one will make compliance a breeze by giving you digital documentation whenever you need it.
That way, you’re protected if anyone were to question your hiring, scheduling, payroll or firing choices.
Myth 3: Investing in human resources isn’t for SMBs
If you were listing the most costly parts of running your organization, labor is probably very high on the list. But guess what? You can turn that expense into your greatest asset if you pay attention to what matters to your staff (like managing their onboarding with care).
Onboarding is about making sure new employees are set up for success. Employees do best when they have clear expectations for their role and know what their priorities should be. This can even be small things, like making sure they know how much sick leave they get or when payday is.
And it’s more important than you might think. Without a thorough onboarding experience, 17% of new hires will leave within 90 days and 20% will leave within 45 days. Turnover like that can consistently put you back at square one, having to dive back into a time-consuming cycle of recruiting, screening and hiring again after just a few pay periods.
If you don’t feel like your onboarding process is complete enough to set your new hires up for success, but don’t have the time to design it, you should consider a digital solution.
Payroll and HR software with the appropriate add-ons makes it easier to do onboarding right. Beyond creating prepared, well-adjusted new hires, you’ll also be able to manage the standards required for compliance with labor and recordkeeping laws.
For instance, an employee handbook may seem like something only larger businesses need to ensure thousands of employees are following procedure. But even if you have a small number of employees, it’s important to document your expectations for them.
No one likes having tough conversations addressing employee behaviors. Having an employee handbook and policy manual goes a long way in difficult conversations. Also, a well-written handbook can act as legal protection for your business should issues arise, according to the National Federation of Independent Business (NFIB).
But a handbook is only the first step. It’s important employees know it exists, read it and agree to follow it. While it’s possible without technology, it’s a lot easier with a digital solution.
Think about technology that makes reading and acknowledging the handbook part of the onboarding experience. That way, everyone is on the same page from the beginning. You have proof employees read the handbook, and they can access it when they’ve got questions.
Heartland Payroll+ was designed specifically for small business, so affordable pricing and user-friendly technology are a given. You buy what you want, when you’re ready for it, with the option to change your mind at any time.
The tech you buy is important. The provider you buy it from matters just as much. When it comes to guidance on compliance, company policies, hiring, terminations and more, we’re here for you.
Don’t allow your team, your business or yourself to fall prey to common myths for another minute. Learn more today: https://www.heartland.us/products/payroll-plus