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.
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.
Manually processing timecards has always been difficult for administrators. It requires a great amount of attention to detail and patience, especially when correcting errors.
Correcting errors is time-consuming and labor-intensive, but it is a whole different story when it comes to forgetful employees.
Without the employee timecard, it is particularly difficult for your back office team to determine the number of hours an employee has worked. If an employee has failed to submit a timecard, your HR or administrative team has to go through the tedious process of individually following up with your employee to submit their timecards thus delaying client billing and increasing the HR labor costs.
With the help of Bilflo, administrators can see the missing time cards for all week-ending dates and send email reminders with one click. Saving you and your team valuable time and money.
It also gives companies flexibility on how and when they will bill their clients. Choose to invoice only when all of the employees in an invoice group have approved time, or create the invoice with the approved timecards you have on hand to avoid delayed client billing. Once the late timecard has been submitted and approved, another invoice can be created with one more click.
You can check this quick video on how to do this on our platform.
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:
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.
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: