Six Payroll Challenges For Small Restaurants 0
Managing a small restaurant is no easy feat. One would be dealing with several things all at once; coming up with strategies to drive sales, training employees on great customer service, and implementing customer reviews, and a more pressing issue: payroll processing.
Many small restaurant owners are having a difficult time meandering through the complexities of managing payroll, unlike other small businesses. You can’t afford to make mistakes while managing payroll. Mistakes often led to paying penalties which may affect your business.
You don’t want that.
In this article, we discuss some of the various payroll challenges for small restaurants and cafes.
Minimum Wage and Overtime.
Since 2009, the federal minimum wage has remained $7.25 per hour. However, states, cities, and counties have implemented a much higher minimum wage for employees. If the state and the federal minimum wage is different in the state your business is situated, you’d have to pay your employees a higher rate.
In the event that an employee exceeds 40 hours per week, he or she must be paid one and a half times more than their regular pay per hour.
When it comes to overtime, a lot of restaurant owners get it wrong. For some employers, calculating overtime fees of workers is still a challenge. There’s a seemingly overtime wage difference between tipped and untipped employees.
- For tipped employees. The overtime wages for a tipped employee is ascertained from the full minimum wage.
- For salaried employees. The overtime wages for a salaried employee is calculated on how his or her salary is set up and how many hours they worked.
Meals as Fringe Benefits.
Most restaurants offer meals to their workers, especially kitchen staff, who are always on duty. The IRS regards this as a fringe benefit. As a restaurant owner, you have the ability to exclude these meals from your worker’s wages. As long as the meals are provided to your workers on the premises, and they don’t go elsewhere to look for food, you can deduct the meals.
Most times, restaurant owners get this mixed up and this poses a problem for their business. However, it would be unreasonable to place charges on doughnuts, coffee, or any other meals taken by employees working overtime.
Too Many Forms.
Another payroll challenge restaurant owners face is the number of paperwork piling up on their desks daily. Having to sort out of the onboarding process for new employees, processing payroll, and of course, staying on the side of the law regarding tax laws.
When you consider the different wages of workers, expenses made, and the revenue flowing in, this can pose a serious payroll challenge for owners of small restaurants. It is highly recommended that you use payroll software or hire the services of professional payroll providers to handle all the complexities of tax and payroll.
Possible Discrimination on Job Applications.
As an employer, there are certain questions you’re prohibited to ask a potential employee, in order to not face lawsuits. Some of them include:
- Asking about previous arrests or convictions.
- Asking about their age.
- Religious holidays
Offering Parental Leave and Paid Sick.
One payroll challenge small restaurant owners face is the understanding of how sick and parental leaves work. An experienced payroll provider is what your business needs if you cannot handle this issue yourself.
Payroll fraud is one of the crippling challenges of small restaurants. If unchecked, your business could take a serious hit. Some employees with ill intentions may illegally log in time which they never appeared on their timesheets. Handing out this responsibility to a payroll provider will save your business in the long run.
Do Small Businesses Need Payroll Software? 0
When you work for someone else, payday is one of those days you look forward to every month. When you own your own business, however, payday becomes one of those days you dread -- especially when you don’t have the necessary tools and payroll software to get it done right.
If you want to avoid all the late hours, booming headaches, and frustrating nights spent trying to make sure your business’ payroll is perfect, finding an efficient payroll software can solve all your troubles.
Of course, not all payroll software is created equal and you’ll have to take a lot of things into consideration when choosing the right one for your small business.
Independent Contractors vs. Employees
Your employees are generally broken down into two major categories -- the independent contractors and the employees. Ideally, the best payroll software will have features that cater to both categories, giving you an all-in-one solution.
With that being said, independent contractors are often much easier to handle. You’re not on the hook for paying their taxes and simply need to have an efficient way of getting the money to the contractor.
Still, payroll software can help you keep track, schedule, and manage these transactions. It can also assist with 1099s and storing contracts.
With employees, quality software for payroll becomes a necessity. There’s a lot that needs to be managed with employees and the software is your gateway to keeping everything accurate, accessible, and organized.
Benefits of Payroll Software
Most small business owners don’t feel they need payroll software, especially if they don’t have a long list of employees to manage. That’s why we can understand when an owner is hesitant to jump aboard the payroll software train.
Still, finding the best payroll software for small business owners comes with a wide range of benefits -- no matter the size of your company. We’re going to discuss three of the most prominent benefits below and how they can have a positive effect on your business.
1. Saves Time
Think about all those long nights you spend doing math and entering data into various sheets several times just to make sure everything is correct. Think about the time you spend writing checks, preparing envelopes, mailing checks, and wiring funds.
Now I want you to imagine if you had all that time to spend doing something else. Wouldn’t that help you stay a little more productive every month and relieve some of that end-of-month worry you always had?
The best payroll software for small business owners can turn several hours worth of work every month into just a couple minutes of easy work. That’s what we call powerful.
2. Avoid Mistakes
One of the things that make small business owners nervous when doing payroll is mistakes. Everyone understands the magnitude of a payroll mistake and how it can negatively affect the employee, but human errors are more common than you think.
Did you know the IRS sends out nearly $5 billion in penalties every year due to mistakes made with employment taxes? That’s a lot of money and there’s a good chance most of it could be avoided with the right tools and resources.
Quality payroll software can help you stay on top of regulations, rules, laws, withholdings, scheduling, and so much more. It takes any and all guesswork out of the equation.
3. Shift Focus
As a small business owner, you have a lot on your plate. Chances are you didn’t start your company to do payroll and it’s definitely not something you want to be spending hours on end doing.
The last thing you need to worry about is the payroll process -- especially mistakes that could’ve been avoided during that process. With the right payroll software, you finally have the ability to focus solely on growing your company.
Signs Your Small Business Needs Help
Knowing when it’s time to find a payroll provider or software can be a tough call for a business owner. On one hand, you’re telling yourself you can continue to manage it without a problem. On the other hand, you can’t wait to rid yourself of the added responsibility.
The truth is any business with several employees can benefit from payroll software. Still, it doesn’t mean every business needs to invest in payroll software. To help you better determine whether or not you should consider this addition to your operations, we’ve listed some of the major signs your business is ready for help:
- Automation is one of the easiest ways small businesses are innovating to create a more efficient and productive environment. Investing in payroll software is one step in the process.
- You might want to consider payroll software if you find it difficult to manage all the unique administrative tasks when doing payroll. It can handle bonuses, weekly schedule, monthly schedule, benefits, and much more.
- Small business taxes can be a nightmare for any owner. If you agree with this, payroll software helps simplify this process so you can sleep better at night when taxes are due.
- If your employees are constantly asking for access to their paycheck history or constantly have requested to change personal information, payroll software takes a large amount of weight off your shoulders.
- Businesses are unique in the different techniques they use to operate their company from top to bottom. If you need a way to integrate your payroll with other technology in the office, payroll software can help.
A quality payroll software comes with great customer support to ensure your demands are met at all times. This gives you confidence in your payroll and allows you to feel much better about the future of your business.
Consultants In-A-Box Is Here to Help!
If you’re searching for the best payroll software and need a provider that stands by their clients, Consultants In-A-Box is ready to serve you. We offer a quality solution to your payroll needs and ensure our clients are met with the most courteous customer support possible.
Contact us today to discuss how we can assist your company with its payroll needs. We can’t wait to hear from you!
How to Choose a Payroll Provider 0
Ensuring your business maintains a proper and effective payroll strategy is essential to the long-term success of your company. While many owners struggle to do this themselves, a payroll service provider can help take the weight off your shoulders.
You’re the business owner. You shouldn’t have to worry about managing payroll -- that’s someone else’s job. The more time you spend worrying about payroll, the less time you spend building the future of the company.
Investing in a payroll provider helps build employee loyalty and shows you take the culture of your business seriously. Since every provider claims to be the best payroll provider for small businesses, we’re going to discuss some of the major things you should look for in a payroll provider.
Here are our top-10 characteristics of an effective payroll service provider!
1. Payroll Taxes
There are a lot of reasons why you might consider a more streamlined payroll strategy, but one of the most important is automation. Without it, you open yourself up for errors when deducting payroll taxes because most business owners aren’t experts when it comes to this.
It’s not your fault, you have better things to worry about. That’s why payroll software should be equipped to do this for you with extreme precision. You’re not a tax professional and you shouldn’t have to be.
Look for software that is regularly updated, as well as one that supports 401(k) deductions, HSA deductions, and wage garnishments.
2. Tax Filing Errors
Every business owner understands that perfection is always the goal, but it’s rarely the outcome. Errors happen, mistakes exist, and no one -- not even software -- can run away from them. Unfortunately, that won’t stop the IRS from charging you a penalty or your employees from getting restless.
In the event your provider makes a mistake, it shouldn’t be labeled as your fault. Always ask your provider what happens when an error occurs and whether or not they will take responsibility for the error.
Anytime you’re dealing with payroll, you’re handling extremely important and confidential information. Whether it’s an employee’s new hire paperwork or earnings, you have to be confident your provider isn’t prone to security attacks.
It’s best to work with a provider that limits work with overseas companies to prevent the risk of hacking. They should also have a proactive plan in place for when an attack occurs and how to eliminate the threat immediately -- ideally before it strikes.
4. Paycheck Processing
All employees receive a paycheck for the work they complete, but not all employees are paid similarly. Some are paid a salary, some are hourly, and some are paid a fixed-price amount for their work. Even then, some employees are paid different amounts depending on experience.
When choosing a provider that’s right for you, it should have no problem keeping up with all the different employees you’ve hired over the years. If it can’t keep these things organized for you in an efficient manner, find a new provider immediately.
5. PTO & Vacation Days
Manually tracking days off, vacation days, paid time off (PTO), and sick days opens the door for more errors and mistakes. The last thing you want is an employee taking off more time than they’re allowed to due to a counting error on your end.
When looking at the best payroll providers for small businesses, they should have the capability of tracking these days off, as well as a way for employees to easily request time off. Having everything in the same place means you only have to do a brief review instead of blocking out a whole day to determine the schedule for the week.
6. Employee Access
A truly effective provider makes it easy for any employee to access their account at any time of the day. Having this option available to an employee avoids any delays when that employee needs a pay stub or is curious about the amount of time they can request off.
Much like an owner should have these things easily available to them, so should the employee. They experience life changes frequently, so having access to their account can also help with changes of address and changes to new hire paperwork.
7. Payment Options
Did you know 4 out of 5 employees prefer direct deposit as their payment method of choice? Having a provider that supports this payment option is critical to keeping your employees satisfied and also leads to less frustration on your end.
At the same time, there’s still that 1 of every 5 employees that prefer a physical check. With that being said, your provider shouldn’t leave them in the dark. Having the ability to change payment options and having several options available to the employee is essential.
Most business owners have their own way of keeping track of their payroll, accounting, and other financial aspects of their business. Your provider is sure to bring some new concepts and changes to the board, but that doesn’t mean you should have to do a complete overhaul of your process.
Your provider should easily integrate into your current operation and shouldn’t impede on anything happening in your company at that time. A seamless transition means fewer errors from the get-go, which is crucial.
9. Customer Support
It doesn’t matter what product or service you’re talking about, there comes a time when you need customer support to explain something or answer a question. That’s why customer service is so important when searching for a payroll service.
The right service provider won’t have you listening to music when you call them. Instead, you’ll hear a real human’s voice ready to assist you immediately. No strings attached and no distractions, just pure customer support.
When getting started with a service provider, you don’t want any surprise expenses along the way. After all, that’s one of the reasons why you’re switching to a service provider.
To ensure your provider doesn’t try to overcharge you or stay quiet about hidden charges, you should understand what the fees are the following things: tax filings, W2s, 1099s, changes, cancels, direct deposit, check printing, employees that don’t work in a given time period, integrations, PTO tracking, HR features, and annual fees.
You’ll also want to ensure you understand the pay scheduling and whether or not the fees are subject to change.
Now that you have a much better idea of how to find the best payroll providers for small businesses, it’s time to put that knowledge to use for your business. If you’re ready to get started with a provider that meets your needs, contact Consultants In-A-Box today.