Payroll Process Improvement Ideas
Last Updated October 22, 2024
Employees are the glue that keeps your business moving. Managing employee payroll might not sound exciting, but everyone on your team expects a timely paycheck. Payroll is crucial, but it can also be challenging if cash flow is tight. Slow-paying customers and unexpected expenses can also lead to tricky payroll situations, hurting morale and disrupting your business.
You can’t plan for all eventualities, but solid payroll processes will help you avoid many of the headaches that come with running an employment agency. From payroll funding to accounting software, there are plenty of ways to create a more efficient payroll system. Check out this guide to understand the impact payroll has on your business and how to streamline payroll for optimal cash flow.
The Impact Your Payroll Process Can Have on Your Staffing Company
Payroll ensures employees receive their checks on time, but it’s so much more than that. Left unmanaged, payroll can cause cash flow problems that leave you in desperate need of funding. The opposite is also true: if you experience cash flow problems from customers failing to pay, it hurts every area of your business, including payroll.
Poorly managing payroll can lead to a slew of issues, from employee morale to compliance. Missing payroll is a no-no. Most states require you to compensate employees and contractors during a specific timeframe or face legal action.
Even if you have only a single employee, following a streamlined payroll process will set you up for success, both today and in the future. Improving payroll processes will keep you compliant, help you save money, and enable you to support your employees.
How to Improve Your Staffing Agency Payroll Process
Proper payroll management is the key to improved cash flow. Try these payroll process improvement ideas to keep your business on track.
Ensure All Required Documentation for Employees Is Complete, Accurate, and Up-to-Date
Administrative errors can lead to delayed payments. If you’re wondering how to improve payroll processes, ask HR to check for missing or inaccurate employee information.
You should verify employee information at least once a year. That includes details such as:
- Legal name
- Mailing address
- Banking details (for direct deposit)
- W-2 documents
- A copy of their driver’s license
Failing to record this information can lead to significant delays. It can take a few days to change this information in payroll software, so the sooner you update this information, the less likely it is to cause delays.
Automate Your Accounting Processes Wherever Possible
Small businesses might be able to get by with manual accounting processes and spreadsheets, but that won’t fly as your business grows. Automate as much of your accounting as possible. That includes:
- Payroll: Does your HR team have to run payroll manually? This is a recipe for errors and missed payroll, especially if there’s a holiday or someone is out of the office. Payroll software will give you the option to turn on automated payroll, ensuring the system pays employees on time, every time.
- Invoicing: Automated invoicing is a huge help. This technology automatically logs line items and generates invoices for every customer. If you have delinquent accounts, the system will automatically send reminders and charge late fees.
- Reporting: Up-to-date reports are a huge help for running a successful business. Automated reports can pinpoint issues, like slow-paying customers, so you can quickly take action.
Invest in Payroll Software
Manually cutting checks takes way too much time and introduces the possibility of delays and errors. If you’re looking for a way to improve payroll services and operations, software is key. Look for solutions that offer real-time reporting, tax filings, and employee self-service portals.
Give Employees Easy Access to Payroll-Related Information
Employees shouldn’t have to dig for their payroll information. An employee portal gives your team quick access to:
- Pay stubs
- Retirement information
- Direct deposit details
- Tax withholdings
If you don’t make this information available in a portal, your team will have to email HR for every little thing. That takes up too many resources, especially if employees need to gather a lot of information.
Get Employee Feedback
If you want ideas on how to make payroll easier, look no further than your own team. Employees are on the receiving end of the payroll process. While they might not understand all of the nuances and limitations on your side, they still have valid insights into the process itself.
Send anonymous surveys asking the team for both positive and constructive feedback. If you don’t get a lot of responses, you can also schedule one-on-one conversations asking employees for recommendations.
Consider Payroll Funding
If your biggest account fails to pay on time, it can leave you in serious need of funding in the meantime.
You don’t have to put payroll on a credit card. There are plenty of practical ways to free up cash flow. For example, if you’re waiting on a customer to pay a large bill, consider invoice factoring, otherwise known in the staffing industry as payroll funding. This option allows you to sell outstanding invoices in exchange for cash up front. You don’t go into debt and receive funding fast—sometimes within the same day. Plus, you only factor invoices when needed, so you have total control over the process.
In-Summary: How to Make Payroll Easier
Try the payroll process improvement ideas in this guide to make payroll as seamless as possible. Careful planning, organization, and the right technology make all the difference. Whether it’s focusing on how to improve payroll skills through training or exploring financial solutions like payroll funding, the right strategies can significantly enhance your company’s payroll processes.
Need to Improve Cash Flow to Make Payroll? Try Payroll Funding with altLINE
The payroll funding process is simple. Once you invoice a customer, you submit that invoice to altLINE, where we then advance up to 90% of the value of each invoice to your business, typically within 24 hours. We then assume collection responsibilities. Once your customer has submitted payment, any remaining value is released to your lockbox, minus the small factoring fee.
With altLINE, you are provided a dedicated account manager devoted to managing your AR, allowing you to not only make payroll without worry, but alleviating some of the stressors that come with managing receivables. altLINE can provide same-day funding and offers completely transparent rates.
If you have any questions about the payroll funding process or want to learn more about whether your staffing agency is a good fit, feel free to fill out our free payroll funding quote form or contact one of our representatives at 205-576-7428.
Michael McCareins is the Content Marketing Associate at altLINE, where he is dedicated to creating and managing optimal content for readers. Following a brief career in media relations, Michael has discovered a passion for content marketing through developing unique, informative content to help audiences better understand ideas and topics such as invoice factoring and A/R financing.
