For entrepreneurs, launching a new business is very exciting. It’s also a busy time – as you establish your business, hire the right staff and resources to ensure long-term viability. Fortunately, this process is made much easier by implementing a payroll system. Here are our top five tips on adopting a payroll system for your venture.
1. Ensure your business is compliant
Many entrepreneurs run into financial trouble because they fail to comply with current legal regulations. To ensure you are not caught out, contact the ATO to ensure you have the right business structure and are complying with all relevant taxation laws.
2. Determine your company’s unique needs
Before choosing a payroll service provider, decide exactly what you need from the service. Take an inventory of your business to identify your specific needs. Often run off their feet, many entrepreneurs opt for an all-inclusive service, which tracks direct deposits, payroll metrics, basic tax and salary calculations for employees.
3. Classify workers correctly
As a small business owner, you need to know the difference between employees and independent contractors. Understanding this distinction affects how things like income tax, superannuation and redundancy is paid.
For employees, you have control over what they do and how their tasks should be completed. While contractors have more autonomy over how required tasks are completed.
4. Maintain accurate records
When starting a small business, a good record-keeping system is absolutely vital. By law, all Australian businesses are obligated to keep records relating to business operations. The records you need to keep include:
• Your business’ profits and how much you spend
• Everyone you employ
• The centre of your operations (i.e. location), and;
• How every task gets done.
Keeping good records helps you to: keep track of your progress, manage cash flow, determine your financial health, complete tax and super returns, and more.
5. Adopt a small business payroll service
The right payroll service can improve efficiency, organise financial and tax records, and enhance security. Investing in a payroll service eliminates human error, resulting in reliable data. And, as records are electronic, you no longer have to keep track of reams of physical records.
Ready to start your business on the right foot? Take the stress out of finding the ideal payroll service by calling or emailing the friendly Propeller Advisory team today.