Every business has to deal with payrolls and effectively managing a payroll can be quite challenging, especially when the business starts growing.

There are so many different aspects that come into play when it comes to making payrolls and many businesses struggle with effective payroll dispersion. This is exactly why a substantial amount of businesses have invested in payroll solutions. 

These consulting agencies use their vast amount of expertise to help their clients understand intricate details of payroll dispersion and help them manage these finances effectively. However, the underlining reason why so many businesses are outsourcing their payroll to consulting agencies is to avoid crucial mistakes that can result in financial penalties.

We at A&B Accounting understand how difficult it can be for a business to manage their payroll, which is exactly why we have articulated a list of common mistakes that every business makes when drafting payrolls.

Payroll taxes

Determining payroll taxes can be quite complicated, especially if the business has an extensive list of employees.

The Government collects payroll taxes whenever a company pays their employees and not paying these taxes could lead to devastating financial penalties which can seriously hamper the progress of the business.

Calculating the exact amount according to the company head count is complicated and most business make mistakes when allotting tax payments. You can integrate with a payroll solution company who will manage that for you.

Misclassifying Employees & contractors  

Another common mistake that most business make while drafting payrolls is misclassifying employees and contractors.

Employees are directly related to the business while contractors are third party individuals that work on contractual basis. This misclassification may be an honest mistake but is considered to be a serious fraud; it could result in substantial penalties.

Calculating Gross and net payroll

Finally, the last mistake that most business make is miscalculating gross and net payroll due to the different payroll taxes that they have to take into account. There are so many nuances and formalities when it comes to calculating these figures that it can prove to be challenging for any businesses financial department.

So if you want to save your business from a substantial amount of penalties and to effectively manage your payroll structure, please consider A&B Accounting as the solution to all of your business needs! For more information, please call us at 954-596-9966.