Running a small business can be incredibly rewarding, but it also comes with many challenges – especially when you’re in the growth stage. As managers expand operations and bring on more staff, keeping track of the company payroll can become increasingly difficult. Thankfully, there’s an easy way to keep on top of costs and employee compensation, and that is through the use of pay stubs. In fact, pay stubs (or payslips) are vital both to the companies and the people who work for them, and here’s why:
Saving employers time and money:
Keeping track of employee salaries and compiling financial records takes up a lot of time, and hiring an accountant to do it for you is anything but cheap. Pay stubs work to make the process simpler and faster, and they can be used by just about anyone. They’re extremely easy to understand and even easier to fill out, covering everything you need to manage employee salaries on a single document.
Audits are no myth:
The more a small business grows, the more attention they’re going to attract from the taxman. A future-proofed business should therefore prepare for their inevitable financial and accounting audit as early as possible, and this means keeping a close record of employee pay. Using a pay stub template makes this process easier and more effective, helping employers to avoid fines that are incurred for discrepancies found by the authorities.
No more mistakes:
Creating pay stubs takes so little time, and yet, they can help to avoid a number of time-consuming (and costly) ordeals like compensation disparities and missing records. Even experienced financial accountants make mistakes when calculating things like retirement contributions and tax withholdings, so imagine how easy it is for the average small business owner! Small mistakes and oversights can result in costly fixes down the line, so it’s a good idea to get it right the first time with a pay stub.
Employees need them:
People use pay stubs for all sorts of reasons in their day-to-day lives. For example, a staff member who was applying for a loan for a new house would almost certainly need to prove their income to be considered eligible. A pay stub makes that possible – and straightforward! Pay stubs can also be used by employees to keep track of tax contributions and deductions, helping them to live more financially responsible lives. As a result, a well-informed and financially compliant team is likely to improve productivity both inside and outside the office.
Give it a shot:
If you’re still unsure why small businesses use pay stubs or whether or not they’re appropriate for your company, why not give it a trial run to see how things play out? Any good business person knows to keep a close eye on expenses and profits, but are you giving the same level of attention to employee salaries? Employees are the backbone of any business, so many sure your payroll is watertight and fit for purpose with a fully itemized pay stub.