How To Set Up Payroll Services

When starting up a business it is important to ensure that the payroll services are set up correctly to make sure that there are no accounting issues. One small mistake could lead to someone not getting paid for their work, or lead to a massive accounting error that could cause the government to audit you at a later date. Here is a step-by-step guide on how to set up your payroll services for your small business.

Register The Business With The Government

The first step to setting up payroll is to ensure that the business is registered with the government and complies with all local and federal business laws. You will need to register the business and get a master business license number that is typically issued from a local registry that will do a trademark search on the business name. Make sure that the business is registered with the state revenue agency and has a tax identification number that will allow you to collect and charge taxes.

Establish Payment Method & Schedule

You will need to establish a regular schedule for how you want to pay employees -- options include weekly or biweekly. Make sure that you set up the schedule and stick to it so that people know exactly when their pay will arrive. Also establish if you will issue a check for each employee or if you want to set up their pay to be directly deposited into their bank account. If you choose the option of direct deposit you will need to set it up in advance with the bank and most likely require the employee to give you a void check.

Establish A Secure Database For Employee Information

The in house accountant will require information on each employee to process their pay each cycle. The accountant will need the employees name, current address, date of birth, and valid social security number that will allow them to legally work in the United States. They will also need to know their rate of pay to be paid hourly or if the employee is paid a base salary regardless of the amount of hours they work. This information will all need to be stored in a secure database that is protected from potential hackers that could steal private information of the business and employees.

Following these steps outlined above will give you a base to build your business' payroll and get it up and running. If you have questions about how to set up your specific payroll for your business you should always consult with a professional accountant, like those at A & C Accounting & Tax.