Mitigating business risk is easy with the right payroll software

Managing your business’s payroll comes with risk, from tax compliance to fraud and more. Here’s how payroll management systems, like Sage, can help your business navigate and mitigate these risks with ease.

One of the earliest decisions you’ll make as a business owner is how to manage your payroll processes.

Whether you’re just starting out with a handful of employees, or have a full staff complement – you need a system to ensure your payroll processes run smoothly and without risk each month. 

“The technicalities and need for vigilance increase exponentially as the company grows and its workforce expands,” says Gerhard Hartman, Medium Business Vice President for Sage Africa & Middle East. Even if the company downsizes staff and turns toward independent contractors, payroll-related issues should be considered.”

But there’s no need to panic. Hartman offers three fundamentals to stop business owners from making small mistakes that can turn into crises:

Understand the process thoroughly 

Whether you manage your business’s payroll processing internally or externally – through an accounting firm or external provider – you need to understand payroll taxes; how to track, administer, and record your company payroll; and maintain an oversight on communication. 

Know what’s taxable 

It’s important to know which elements of your payroll are taxable and which aren’t – and to stay on top of these items annually, in the event legislation changes.

Generally, one of the main taxable components on your payroll is employee wages – from full-time to part-time salaries as well as hourly wages, fees, bonuses, and commissions.

Items generally not subject to payroll taxes (and excluded from employee income under the Internal Revenue Code) include non-cash compensation deemed as ‘statutorily excluded’ or 'fringe' benefits. These include group term-life insurance, some medical schemes and parking privileges. By compensating in these ways, your business can ease its payroll tax burdens. Reimbursement offers allow your business to cover employee travel, entertainment, or other eligible business-related expenses, and lessen payroll tax fees in the process.

Secure detailed records

Employers must store and safeguard payroll records for a host of reasons. These include hiring records and ongoing employment records like expense notifications and timesheets. These should be kept on file alongside non-payroll related documents like performance reviews, disciplinary actions, and terminations.

Now, keeping track of all this payroll data may seem overwhelming. But you can streamline your business by simply digitising your payroll processes. This is where online payroll management systems step in and help your business, accounting team, and HR team stay on top of your payroll system and manage it seamlessly – all on one platform. 

Sage HR & Payroll software allows you to automate your payroll so you can:

  • Stay on top of compliance regulations
  • Cut down on payroll administration
  • Pay employees timeously and accurately
  • Calculate taxable pay with ease
  • Easily manage payroll processes on the go

The easy to set up software also makes communication between you and your staff, clients, and accountants easier through WhatsApp integration. 

It’s time to regain control of your business, its records and finances – Sage HR & Payroll processing software gives you easy access to records and data when you need it.

To strengthen your business, find out more about Sage products and services here.