01 May 5 Payroll Mistakes You Might Be Making At Your Practice
Most people rightfully assume that payroll is all about getting a wide array of numbers to lock up and make sense. As true as this may be, however, it only scratches the surface of what the payroll process typically entails. Many dental accountants think they’re handling payroll the way they should be, yet a number of common mistakes are made by practices both small and large each year. The end result? In-office discomfort, poor staff retention and a veritable mountain of backtracking.
Fortunately, you can put an end to payroll mistakes simply by recognizing what they are. If you know what to avoid, you’ll be one step ahead of the game. Here are five payroll mistakes you might be making at your practice in 2018, all of which can be mitigated with the right approach and attitude.
1. Paying Employees Too Much or Too Little
When it comes to watching the numbers lock up correctly, one of the easiest ways to upset the applecart is to pay employees either too much or too little. It can happen for a number of reasons—manual error, confusion over changes in pay-rate, etc.. Perhaps an employee is paid hourly and they ended up working more this week than normal, yet didn’t properly log their hours. The important thing here is to ensure that all initial data is entered correctly. Otherwise, you’ll find yourself spending hours if not days backtracking to find out where the pay discrepancies lay.
2. Employee Misclassifications
Did you know that, as far as taxation and the government are concerned, people who are classified as “employees” and those who fall under the label of “contractors” are treated in much different ways from one another? Specifically, the difference has to do with Social Security and Medicare payroll taxes, a portion of which must be paid by the employer. Make the mistake of classifying an employee as a contractor or vice-versa, and you may be setting your practice up for a wealth of back-tax-related issues.
3. Overlooking Inclusion of Bonuses & Gifts
Bonuses & gifts for employees that have done their job exceptionally can be a great way to boost both staff morale and retention levels. Unfortunately, many employers simply doll-out coffee gift cards and other tokens of appreciation without tracking financials. It’s important to realize that any gift given with some sort of attached cash value (ie: a gift card vs. a Christmas ham) is not tax-free and will end up costing the employer. While this isn’t usually a big deal as long as it’s expected and tracked, giving out countless gifts without paying attention to the details is a one-way trip toward taxation disaster.
4. Late / Missed Processing
For many people, getting paid on time can mean the difference of being able to make rent or buy groceries for the week. It should come as no surprise, then, just how problematic late or missed payroll processing can be. Dental accountants that have a lot on their plates should never use being too busy as an excuse for missing a pay cycle or processing payments late—you owe it to your staff to ensure this doesn’t happen, and if it does, it never happens again.
5. Forgetting About Holidays
It’d be nice if every Monday through Friday was a business day for banks, but that’s unfortunately not the case. Bank holidays do not count as business days and can thus disrupt a payroll cycle if not properly paid attention to and adjusted around. One way to ensure this issue never pops up is to simply sync a “holidays” calendar with your payroll calendar online, as this will immediately show you if a payroll cycle will be affected by a bank holiday—it also takes only seconds to do.
So don’t just assume that they way you’ve been handling payroll all these years is correct. Know which mistakes to look for, and you’ll never make them gain.
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