Getting Payroll “Right”

Payroll Best Practices

If you haven’t reviewed your payroll processes lately, there have been numerous developments in the world of payroll over the last few years which you should consider implementing.

Here are a few mistakes which any small business can consider avoiding to save money, become more efficient, offer better benefits to employees and interact with their vendors more easily.

Payroll Frequency

State laws differ on payroll frequency rules. You should pay the least frequently you can in your state. For instance, here in Massachusetts, you are required to pay hourly employees no less frequently than bi-weekly (every other week, for a total of 26 pay periods per year). If you are currently paying weekly, this simple move can save you approximately 40% in direct cost savings, but also will cut your bookkeeping entries in half and decrease the amount of time which you spend on payroll saving you even more money.

Go Green

Getting ALL of your employees to accept their pay via direct deposit or other electronic delivery method will allow you to stop receiving printed reports and pay stubs. Here in MA, you may dictate that to employees. Although all payroll companies charge different amounts for courier delivery, so the savings will differ with each company, in our case you would save approximately 12% per year by simply going green!

Time and Attendance System

Solutions in this area have evolved tremendously in the last few years. If you currently use an integrated time clock from within practice management software, time cards for employees to punch, or using time sheets or spreadsheets, you have little ability to effectively and efficiently manage your labor costs. By implementing a newer system which is web based, mobile based, or even uses biometrics, any of which can be integrated with your payroll system, you will become significantly more efficient and eliminate opportunities for buddy punching and other employee time theft strategies. Further you will be able to better manage overtime in your office and get better PPACA reporting to make sure you’re in compliance.

Paid Time Off Management

We often see our clients or prospects using paper requests and spreadsheets to manage their Paid Time Off programs. Newer systems allow you to make that process much more efficient by utilizing a Time and Attendance system to manage PTO/vacation requests. Employees can request time through the system, supervisors/owners can approve requests through the system, and new technology even allows you to utilize a calendaring system to make the process of scheduling much easier to manage.

Workers Compensation

This is an area many companies miss taking advantage of. With the help of a payroll company, you can significantly enhance your cash flow and make workers compensation an easier item to deal with. Rather than binding your insurance with a large down payment, payroll companies, such as ConnectPay, can help you to pay for it “as you go”. Key benefits are no down payment, 12 payments, and the annual audit is typically automated. A terrific efficiency and cash flow benefit. Speak with your insurance broker about it, or contact your payroll company to implement a pay as you go workers comp program.

401(K) Plan Management

Whereas most payroll companies want to directly sell you a 401(k) plan, you should never do that. The design is typically poor and the expenses typically very high. Some payroll companies, such as ConnectPay, in tandem with a seasoned retirement expert, will help you to implement a plan with better design, lower costs, and automated processes such as moving data to your TPA for testing purposes, automating the contribution process, receiving fiduciary responsibility, and more…

If you have any questions, or wish to receive a FREE review of YOUR processes and methodologies in payroll, please contact me:


Mitch Zucker
Chief Connector
3 Trescott St.
Taunton, MA 02780

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