Handling payroll for a dental office can be more complicated than many people think. There are many minor errors that can lead to major payroll mistakes. One of the best things that you can do is train your team to catch these errors before they become bigger issues. Our dental accountants have listed the five most common payroll mistakes that can be easily avoided.
- Paying employees the wrong rates
Immediately after a team member is hired, given a raise, or there is any kind of adjustment in pay, make sure that the pay is correctly logged into your system. Using an hourly wage to pay as salary in a program can create rounding errors. Always be sure to double check the pay rates. Manual error can lead to owing back-pay, among other future issues.
- Not tracking bonuses or gifts
Bonuses or gifts that have monetary value need to be closely tracked. Gifts like a gift card or Apple watch are often overlooked. Please be sure to keep a log of gifts and bonuses for year-end/tax purposes.
- Estimated recordkeeping
Don’t procrastinate on logging shifts worked for a pay period. Days can often blend together and the longer that you wait, the harder that it is to recall which days team members worked, left early, etc. Having to go back and review notes and e-mails regarding shifts can be time consuming and stressful, and can lead to incorrect pay.
- Holidays or haphazard payroll
Make an effort to set a fixed schedule for payroll. Have a plan for dealing with holidays that affect the normal payroll schedule. Missing or late payroll can cost your business in the long run by incurring penalties or creating tax headaches. It can also make it harder for team members that depend on the money.
- Misclassification of Employees
There are a number of differences between an employee and a contractor on both the state and federal levels. Make sure you classify your team members and any temporary team members correctly to ensure an accurate and smooth process. Misclassifying an employee can cost you heavy penalties.
Payroll can be an uncomplicated process if the correct protocols are followed. Follow a strict system, don’t procrastinate, and fix any mistakes as soon as possible. Contact our dental accounting firm with any questions or concerns in regards to payroll and taxes.