THE 3 WAYS TO MANAGE THE PAYROLL ACCOUNT OF YOUR STAFF
As they say, “Business is all about people. And your people are your most important asset.” Managing the people who work for you is one of the most challenging activities in business, talk less of their payroll. If this intrigues you, we want to talk look at the three ways to manage the payroll account of your staff!
A business owner must develop a very effective compensation system that rewards employees and encourages high levels of productivity. To be effective, the system must be accurate, reliable and consistent in its handling of the compensation processes and calculations. If you don’t manage your staff’s payroll well—you know what will happen to you!
Multisoft Solutions Limited has played a frontline role in the rollout of such systems and has over the last decade, helped hundreds of Ghanaian business resolve the challenge of payroll accounting.
If you are new to the terminology, you might be asking, “So what is payroll accounting?”
Payroll accounting is the specific accounting discipline concerned with the calculation and disbursement of compensation for employees covering salaries, overtime, bonuses and allowances that have been earned by its employees and withholding the appropriate statutory deductions such as PAYE taxes and Social Security deductions.
|Image Credit: Pay Chex|
There are four -jobs you need to accomplish when “doing payroll”:
- Calculating the earning
- Calculating the deductions
- Paying the employees
- Filing the statutory returns, PAYE and SSNIT
1) Calculating the earnings: Do you summarize and pay them every week, fortnightly or every month? This part of the job requires you to add up employees’ hours and value it at the contract rate and where there is overtime at the overtime rate.
2) Calculating the statutory deduction: When doing payroll, you need to deduct the correct amount of taxes based on the legislative instruments enforce during that pay period. The government needs taxes to pay for critical services.
3) Paying the employees: You can pay cash, cheques or electronic transfer.
4) Filing Tax and SSNIT Forms: The returns to government are supported by PAYEreturn forms and you’re required to fill and submit all of these forms in a timely manner.
Does this look cumbersome?
Yes it does, there are basically 3 ways to manage the payroll accounts of your staff!
- Managing the payroll manually
- Investing in a payroll software
- Subcontracting to a payroll management firm
Managing the Payroll Manually
One of the ways by which small-to-medium enterprises manage their payroll is by doing it manually. It is often referred to as “table top payroll.” The staff signs and their money is given to them by cash, no deductions and no filings.
This form of payroll management can lead a business into trouble, you can never outwit the long arm of the law. But you know what? It is amazing the number of companies in Ghana still hooked up to this way despite the enormous exposure!
Investing in a Payroll Software
Payroll software packages make the process of calculating payroll for employees and withholding of taxes a simple process. The software can also be used to automate the process of making electronic funds transfers from the payroll account to the bank accounts of the employees.
In order to ensure efficiency and accuracy for the long term, your company has to be very careful in selecting payroll management software. “Cheap” payroll software can be expensive for the long term!
Consider Reading: Why “Cheap” Payroll-Software is Usually More Expensive
Subcontracting to a Payroll Management Firm
One of the best ways to run business smoothly is to identify what you can do well and then outsource your weakness to firms that can do it better. This will enable you to be the best in what you do!
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When it comes to payroll management, you can also outsource your payroll function to a credible firm to manage for you. This will enable you to concentrate on the most important things such as managing and leading your team to achieve your business goals and objectives.
Consider Reading this if you want to subcontract your payroll: Why Payroll Is One Function You Should Outsource.
Which is your choice now? Which of the “3 Ways to Manage the Payroll Account of Your Staff” are you using? Are you also planning on upgrading and developing your payroll management system?
For more information please contact us:
+233-(0)302-235-149/ +233 (0)244 263353