There is a lot riding on the way your small business handles payroll recording and recordkeeping.
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In addition to fulfilling payroll reporting requirements, accurate payroll records play an important role in financial accounting, benefits administration and annual performance reviews. Even if you have outsourced payroll to a third-party provider, your ability to maintain accurate payroll records will impact multiple areas of your company.
A weekly payroll record tracks payroll on an individual basis. The way you structure your weekly payroll record is up to you, but forms include data fields for pay rate, weekly gross compensation, weekly payroll withholdings and annual compensation to-date. Some forms also have fields for the worker's social security number and other information that is used for payroll administration.
But a great form only has value to the extent that the organization uses it as a reporting and management tool. With that in mind, here are some of the common ways small businesses use weekly payroll records to improve employee management and reporting functions.
- Accurate recordkeeping. Weekly payroll records contribute to a culture of accurate recordkeeping within the organization. Rather than reporting lump sum totals, weekly payroll records provide granular details about your company's payroll expense and create a useful tool for labor expense management.
- HR access. Weekly payroll records also give HR personnel at-a-glance access to worker payroll information. The inclusion of pay rates and other HR data on the form makes it easy for human resources staff to perform routine analyses of compensation levels and payroll activities.
- Deduction tracking. A robust weekly payroll record documents payroll withholdings for taxes and benefits. A quick tabulation of individual payroll records should result in the total weekly withholdings for specific tax or benefit categories. Accounting can use weekly report totals to verify the amounts contained in the accounting database.
- Dispute resolution tool. Employers can use weekly payroll records to resolve disputes regarding gross pay, net pay or withholdings. Although payroll software can also be useful for resolving disputes, a weekly payroll record is a useful tool for showing employees how their compensation was distributed in any given week.
- Legal documentation. Hopefully you'll never need to introduce weekly payroll reports as legal evidence. But if worse comes to worst, it's comforting to know that you have properly documented every worker's compensation and withholdings at the weekly level.