Making payroll is perhaps the most important task in a business. If a business is running short on funds to meet payroll, the priority must be to secure funding from an alternate source. Here are five common payroll problems and how to solve them.
Hiring Outperforms Incomes
Often small companies will experience rapid growth, and a business owner feels pressure to hire more employees. In some cases, a small business will not have had time to build up revenue to cover the added staff. The business owner must use the current working staff on the payroll to do better by coming up with smart strategies. The expansion of staff should happen after the business has built enough steady income to meet payroll.
Temporary Staff is Needed
If your business wins a project, and you need more staff to carry out the task before the deadline, you have to increase the payroll of your company. A temporary project also increases the expenses in a company. This is a common scenario in construction companies, landscapers, and designers. This process is predictable and calculable. You must know when to hire new staff, how to manage their payroll funding, when the revenue builds up, and how to overcome expenses until your revenue is generated. Prepare in advance and plan out the finances and other issues. You can take money out of the last season of your business or borrow money for the payroll funding until the next season yields revenue.
At start-up, business owners often hire more employees than are required. These owners can get in the habit of hiring staff for any new task that arises instead of dividing the work among the existing staff. Before hiring another team member, work on other options such as outsourcing contractors, finding automated ways for tasks to reduce the burden on the team, and reorganizing existing teams.
Delayed Payments by the Customers or Discounts given to Customers
Many customers delay their payments. In a small business, if you are running short on income, quickly generate invoices and send them to customers immediately. This will minimize the delayed payments by your customers, to some extent.
Offer them discounts if the payment is made within a given time frame before the deadline. Always encourage your clients to pay quickly.
Use Invoice Factoring for typical slow-paying customers.
Misconstruing Payroll Taxes
Carefully calculate the payroll taxes. Otherwise, IRS will send notice to you that you owe your employees money.
A taxpayer can request the IRS to make a negotiation on payroll taxes for small businesses and settle payroll taxes lesser than the full amount.
Payroll problems are a common issue in small business setups. If not carefully planned, the credibility of your business becomes uncertain due to payroll funding problems. Small business owners should strategically manage their payroll funding by avoiding common mistakes.About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud-hosted desktop where their entire team and tax accountant may access the QuickBooks™️ file, critical financial documents, and back-office tools in an efficient and secure environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.