We totally believe that many mistakes are technical and unintentional, but they can be costly for businesses. In fact, according to the IRS, 40% of small to mid-sized businesses face IRS penalties related to incorrect and delayed payroll filing. But what, exactly, are the mistakes that happen during the payroll process? Here are the 3 most expensive payroll errors and how to avoid them.
Most Expensive Payroll Errors
- Depositing employment taxes late
- It’s important to be crystal clear on employment tax due dates.
- Mis-classifying employees and contractors
- It’s crucial to make sure you understand each classification and classify every person you hire correctly straight out of the gate.
- Processing payroll using the wrong state
- If you have employees that work in different states, keep accurate payroll records and organize your files based on the state they work at and NOT where your office is based.
We know that no business wants to spend its hard-earned revenue on payroll penalties. But when you process payroll manually, you’re leaving a lot of room for human error.
Our team at Bilflo helps staffing companies automate their back-office workload such as timekeeping and payroll to reduce these costly errors and streamline your existing processes.
Bilflo ensures that our timekeeping software handles different timecard options and is fully customizable to meet your organization’s needs, we also handle overtime calculations in all 50 states to help you stay compliant by only showing state-applicable overtime rules.
Aside from this, we take automation to the next level by combining it with Business Intelligence to provide you meaningful insights to make data-driven decisions.
Feel free to take 3 minutes for a preview of Bilflo.
- 30 sec Video Experiences of the simple user interface:
If you want to learn more about how we can help you reach your goal, please schedule a Discovery Session with our team today.
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Under the FLSA, employers must pay overtime wages for any overtime worked—authorized or not. Failure to do so could land business owners with an expensive penalty, a lawsuit, or even jail time.
According to the Department of Labor, violators of federal overtime rules may be prosecuted criminally and can be fined up to $10,000. Repeat offenders can be imprisoned and are subject to civil money penalties of up to $1,100 per violation.
Avoiding Overtime Penalties
- The best way to deal with overtime penalties is to not incur them in the first place. The easiest way to do this is to track employee hours and ensure that any employee working overtime gets paid accurately.
- Implement an overtime policy that should state when you allow overtime, how to get overtime authorized, and what happens when workers ignore the policy. It should include clear instructions and consequences for employees, managers, and supervisors.
- Automate your back-office processes to minimize errors that can lead to miscalculation of regular and overtime hours.
At Bilfo, we believe that there should be specific software to manage your back-office while providing you with Business Intelligence that you need to grow your business.
Bilflo helps you stay compliant by only showing state-applicable overtime rules in all 50 states and automatically calculates your employee’s pay. This means no room for errors and definitely no penalties!!!
If you are interested in learning more about Bilflo’s back-office management and Business Intelligence tool, schedule a Discovery Session with our qualified team today.
Employees rely on their employers to pay them correctly and on time. When that doesn’t happen, it can at the very least cause annoyance. But the consequences could go well beyond that, leading to more serious repercussions both for the employees involved and ultimately for your business. Here are just three ways how much manual processes costs a business:
Manual Processes:
Unnecessary Administrative Costs
When a payroll error is identified, it needs to be followed up on, corrected, and records such as tax payments or pension contributions must be appropriately calculated. This leaves your administrative staff with tedious work instead of working on company initiatives that increase employee productivity and loyalty.
Employee disengagement
An error on your employee’s paycheck can lead to several issues for the individual or individuals involved and this only has to happen once to have a negative impact, damaging employee goodwill and engagement. If it’s a significant mistake, or if it happens several times, you run the risk of convincing employees that it’s time to look elsewhere too.
Higher Employee Turnover
Many employers don’t realize how expensive it is to replace employees. A number of studies have reported that it costs about 20% of the annual salary to replace an associate making less than 50k a year and the costs increase with higher-paid employees.*, for example: for a team member making $50,000 a year, that would be $10,000.
These common issues can be resolved with the power of automation.
Automation takes over repetitive tasks and takes away the tedious process of timekeeping, payroll correction, and reporting, giving your HR/administrative team to focus on meaningful work.
In addition, it also addresses employee disengagement and high turnover rates as employees are compensated correctly and on time. This builds trust, loyalty, and employee morale.
At Bilflo, we believe your back office should be on autopilot. Bilflo is back-office management and business intelligence software designed specifically for staffing agencies, AND it’s modular, integrating within your current business ecosystem without disrupting your day-to-day operation.
If you are ready to automate your back office process while gaining real-time reporting for your business, simply schedule a Discovery Session with our team and we’d help take your business to the next level.
Please feel free to check out these 30-sec videos on how our software works:
Keep Your Business Healthy by Getting Paid Fast
One of the top challenges that we face in the staffing industry is getting paid for our services. It shouldn’t be such a headache. Staffing firms find themselves in a cash crisis when waiting out extended payment terms or late payments from customers and as a result, they are unable to make payroll, provide benefits for employees and meet tax requirements.
Aside from the cash flow impact, time chasing payments is time taken away from recruiting new candidates and securing new placements preventing some companies to grow their business.
A new survey by Melio and YouGov filled between March 26, 2021 and April 7, 2021. Completed by 1,002 U.S. B2B small businesses shows the following key findings:
- 55% of small businesses think their clients are deliberately delaying payments
- 50% say late payments should incur significant interest
- 59% say they have direct experience with late payments
- 44% say late payments are a challenge affecting their business
- 47% say late payments have gotten worse due to COVID-19
Melio’s survey shows that due to late payments small businesses have or have considered:
- Delayed hiring (40%)
- Delayed purchasing inventory (39%)
- Cut employee hours (36%)
It also reveals that if they were paid on time, they could have:
- Invested in growing their businesses (64%)
- Paid back and lines of credit more quickly (58%)
Here are some tips on how to get paid in time:
- Maintain great client relationships: Maintain a good relationship with your clients. A client that feels like more than just a revenue stream will want to do more business with you and as a result, will pay you on time.
- Invoice on time: It should go without saying, but if you want your clients to pay on time, you need to invoice them on time. The sooner you get them that bill, the sooner they can pay you.
- Use cloud-based services: Cloud-based accounting automation software help agencies stay on top of their accounting with some advantages that the old method lacks.
- Stick to a payment schedule: If you expect to get your payments regularly, you need to invoice your clients regularly. You maintain the same, consistent calendar. One of the top challenges that we face in the staffing industry is getting paid for our services. It shouldn’t be such a headache. Bill was designed by a busy staffing agency to radically improve back-office payment processes and to ensure that invoices are in perfect order before sending them to customers/clients.
One important thing you can do to improve your payment processing is to migrate from manual accounting to automated accounting. At Bilflo, we find ways to help staffing agencies become more efficient and improve their current process to make room for growth.
See how our integrated solution works by checking out our resources:
Source: Melio