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Trusted Brand Reviews brings you expert insights to guide your payroll processes and human resource management. Discover practical strategies to optimize these systems through HRIS and software automation, freeing up time and resources and boosting productivity.
The Difference Between HRIS & ERP—A Comprehensive Explanation

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The Difference Between HRIS & ERP—A Comprehensive Explanation
Over the last few years, HR teams have been increasingly using software solutions to help them better manage the workspace. Namely, there are many types of these solutions, with HRIS (Human Resource Information Systems) and ERPs (Enterprise Resource Planning) being some of the most popular ones. Despite their popularity, there is still a lot of confusion surrounding the two types of systems. Many believe that they are one and the same, yet this couldn't be further from the truth. In reality, HRIS and ERP systems are quite different, albeit complementary, which is why it's important to understand the difference between these two types of solutions prior to choosing one. What Is HRIS? At its core, an HRIS is a system that helps organizations manage and store employee data. This data can range from contact information and addresses to payroll records and time-off requests. Additionally, an HRIS can also help with talent management and performance tracking. Thus, the main purpose of an HRIS is to make it easier for HR teams to access employee data, as well as use this data for improvements in the future. In doing so, an HRIS can save the organization time and money while also improving the overall efficiency of the HR team. Some of the main features of an HRIS solution include: Managing employee data from a single system. Simplifying hiring and onboarding. Ranking employees based on objective performance. Allowing employees to request sick days and vacations without contacting the HR team. » Need some expert tips for easier payroll processing? Learn about streamlined payroll processing and simpler small business payroll. What Is ERP? An ERP, on the other hand, is a much broader solution that helps organizations manage and automate multiple aspects of their business, from finance and accounting to inventory and manufacturing. While an HRIS focuses exclusively on HR data, an ERP system covers all areas of the business. As such, an ERP is a more comprehensive solution that can be used by all departments within an organization. Some of the main features of an ERP include: Integrating multiple pillars of a business. Unifying business operations. Offering a one-in-all solution for marketing, sales, and accounting. Real-time insight on important metrics like gross income and revenue. 5 Key Differences Between HRIS & ERP Now that we've looked at the main features of each type of system, let's take a more in-depth look at the key differences between HRIS and ERP: 1. Purpose The purpose of an HRIS solution is to allow the HR department to easily store and manage the company's information through the system. Usually, this type of system also features other HR activities like employee training, onboarding, and recruiting new talent. An ERP's purpose, on the other hand, is created to support all departments within an organization—not just the HR team. Namely, this is done by providing a system that can automate various business processes, which often include accounting, manufacturing, customer relationship management, and so on. 2. Functionality An HRIS is mainly used to store employee data and help the HR team with the basic functions. It is a solution that provides functions that can only be used by the HR department ERPs, however, allow businesses to unify different business operations, including marketing, finance management, accounting, and more. Contrary to HRIS, an ERP offers functions that can be used by accountants, marketing experts, and even managers. 3. Database The database offered by an HRIS solution is only used to store employee information. In contrast, an ERP database can be used to store customer data, supplier data, and inventory data. So, an ERP solution's database is more extensive, but it's also much more difficult to maintain and manage. 4. Specialized HR Functions Some HRIS solutions offer specialized functions for payroll management, attendance tracking, and managing employee benefits. They are solutions that are specifically tailored for the HR team. On the other hand, ERP solutions do not offer any specialized HR functions. » Struggling to cope with business payroll? Try automated payroll software instead. 5. Cost & Difficulty of Implementation HRIS solutions tend to be less expensive and easier to implement than ERP solutions. This is because HRIS systems are designed to meet the specific needs of the HR department. In contrast, ERPs are more comprehensive solutions that require a larger investment. Moreover, ERP solutions are generally more difficult to implement because they need to be customized to the specific needs of the organization. This process can be quite time-consuming and costly. Understanding the Needs of Your Organization Even though HRISs and ERPs are oftentimes mentioned in conjunction, the truth is that they offer different features to businesses. This is why it's important to understand the needs of your business and to adequately coordinate your priorities. So, if you think that your company would benefit from a solution that lessens the burden on the HR team, then you probably need HRIS. This solution will manage recruiting, onboarding, offboarding, and even compliance management for you. On the other hand, an ERP will help you manage multiple aspects of the business, not just human resources, but is far more difficult to maintain and not necessarily suitable for smaller businesses.
Do Small Businesses Need Payroll Software for Less Than 10 Employees?

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Do Small Businesses Need Payroll Software for Less Than 10 Employees?
Running a small business with fewer than ten employees might not seem all that difficult—until you realize that you need to calculate, manage, and execute payroll on your own. But this does not have to be a solo crusade as the latest payroll software can ensure successful uninterrupted payroll management. However, is it really necessary for a tiny company with a handful of employees? Everything from taking care of benefits to paying employees on time (and by the right amount), payroll software offers various advantages for your company. Keep reading to learn more. Advantages of Payroll Software Over Manual Processing Payroll software offers a broad array of advantages for small businesses as today's programs can run your organization easier and smoother. Here are just four distinct advantages for any company—large, small, or in between: 1. Paying Employees Relying on payroll software to issue paychecks to employees can become simplified and more efficient. Since it is critical to pay your staff on time and the right amount, the suite of digital tools can take into account a wide range of aspects, including payment method (direct deposit or physical check) and payment schedule (weekly, bi-weekly, and monthly). This is perhaps the most important aspect of payroll compliance since businesses can face fines and endure legal disputes, particularly when jurisdictions have their own tax and labor laws. 2. Automating Processes Manually operating payroll can come with a lot of headaches and many mistakes. From misclassifying employees to filling out the wrong forms, many errors can arise by relying on human input for something as crucial as payroll. Therefore, automating processes associated with payroll can be of tremendous importance since it will reduce your mistakes. Plus, automated payroll can afford you more time and energy to concentrate on ways to boost revenue and grow your outfit. The manual vs automated payroll debate is a simple one to settle. 3. Tracking Benefits At first, it might be easy enough to track employees' overall compensation packages if you only need to do so for one or two employees. However, when your staff continues to increase in number, payroll software can better track a worker's plethora of benefits, be it health care coverage or 401(k) contributions. This makes it easier to manage when more workers join your team. It also helps when you are working with a financial institution or an insurance provider. 4. Calculating Tax Calculating the necessary tax contributions and deductions can be a time-consuming task. Indeed, there are many different types of contributions, deductions, and other tax and compliance scenarios that small business owners need to keep track of to ensure they are in compliance with federal, state, or local tax laws. In addition, employees will have their own tax structures as well: Employee The company is obligated to withhold income tax, Medicare, and Social Security from wages paid.Independent Contractor The small business is not required to withhold taxes. Temp Temporary workers usually work under 1,000 hours for your business, but it is up to you to file payroll taxes and send a W-2 form.Intern If the person participating in an internship is being paid, the employer is still required to deduct federal and state taxes from his or her paycheck. » Ready to get started? Choose from one of our selected payroll services. Plan for the Future It is true that a small business can calculate, manage, and execute payroll without software. However, without the use of software, it takes more time, effort, and organization to ensure that everyone is paid on time, the right taxes are deducted, and people are classified correctly. This leaves two drawbacks: time and the possibility of mistakes. This is especially true when the business and the number of employees grows, which can make manually managing payroll efficiently no longer a feasible policy. Indeed, no matter how intimate you are with figures and how organized you may be, when you have other employees to look after, mistakes are bound to happen! By incorporating payroll software into your day-to-day activities, small businesses can feel confident the right forms are filled out and filed, paychecks are executed, and benefits are doled out to staff.
Small Business Payroll Made Easy: 7 Steps to Do It Yourself

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Small Business Payroll Made Easy: 7 Steps to Do It Yourself
The do-it-yourself (DIY) trend has made its way to small businesses, especially on the payroll processing front. But while manually completing, filing, and managing payroll information might cut operating costs and save you money, it is always best to consult a relevant professional with financial and legislative experience and knowledge of this arena. That said, with such heavy workloads and limited time, it's possible to have streamlined, simple payroll management without any headaches. Here are seven time-saving tips for doing it yourself. 1. Obtain an Employer Identification Number (EIN) An Employer Identification Number (EIN) is a nine-digit federal tax identification issued by the Internal Revenue Service (IRS) to report employment taxes. The EIN never expires and is never reissued to another company. The application process is also a straightforward task and consists of these steps: Determine your eligibility, including a valid taxpayer ID number and the business located in the United States.Gather required business information, such as the date the business was started, number of employees, first date wages, and closing month of the fiscal year.Apply for an EIN either online or by mail. 2. Determine Federal & State Business Requirements When launching and managing a small organization, owners must adhere to many federal and state business requirements. But what rules, regulations, licenses, taxes, and permits are mandated will be determined by a wide range of factors, namely: Business structure Are you a sole proprietor, corporation, Limited Liability Company, or partnership?Industry What a small business needs to operate correctly will be based on the type of industry. For example, the U.S. Department of Agriculture (USDA) will issue permits for firms specializing in agriculture. Business name Entrepreneurs must select a business name and learn if it violates another company's federally protected trademark. This will be done through the U.S. Patent and Trademark Office (USPTO).Intellectual property Should your small business possess any intellectual property, it would be best to register a copyright, patent, or trademark with the USPTO. 3. Employees vs. Independent Contractors: Understanding the Difference It's important to clarify whether your small business is hiring employees or working with independent contractors. The former is someone on a company's payroll and earns wages and benefits in exchange. The latter is a professional who maintains autonomy and flexibility without benefits and perks. It is crucial to understand the difference because misclassifying a worker can trigger fines and penalties, lead to legal disputes, and result in back taxes. 4. Decide on a Payroll Schedule A payroll schedule outlines how often employees receive their paychecks, be it weekly or monthly. This is usually one of small business owners' first steps when hiring employees. But how can a company determine the best payroll schedule? Here are some factors to think about: Are there state regulations that require a minimum number of times employees are paid in a month?How does business cash flow synchronize with the payroll schedule?Are job candidates willing to wait an entire month to receive a paycheck? 5. Calculate & Withhold Income Tax Small business owners must calculate the withholding tax to correctly determine how much money they should deduct from their employees' paychecks. They should then send it to the IRS to make the necessary tax payments. This is performed by assessing the employee's W-4 form, their gross pay for the pay period, and the agency's income withholding table. 6. Pay Payroll Tax A payroll tax is a levy imposed by federal or state governments to cover the cost of public programs, be it unemployment insurance or Medicare. Small business owners are mandated to pay all of the payroll taxes outlined by the government. Payroll taxes vary by government, so entrepreneurs should consult with a licensed tax professional if they are unsure. These are ordinary taxes small business owners can expect to pay: Federal Insurance Contribution Act (FICA) Tax: A two-part 15.3% tax that covers Social Security and Medicare.Federal Unemployment Tax Act (FUTA) Tax: A 6% levy on the first $7,000 employees make annually, paid only by employers.State Unemployment Tax Act (SUTA) Tax: A tax to cover a state's unemployment programs. (The state stipulates this rate.) Employers can then withhold the relevant federal payroll taxes from employees' wages and submit payments, other tax liabilities, and related forms and documents to the IRS. This is done using the Electronic Federal Tax Payment System (EFTPS). 7. File Employee W-2 & Tax Forms A W-2 form is a statement that small business owners must prepare and file for their employees at the end of each tax year. It summarizes an employee's total earnings, federal and state withholding tax, and Social Security or Medicare earnings. Every employee needs to receive a copy, and all forms must be sent electronically or by mail to the Social Security Administration (SSA). In addition, there is a treasure trove of other tax information you can send to the IRS. Here are some common forms to consider: Form 1040 (Also known as Schedule C): This form reports how much money your business earned or lost in a tax year.Form 8829 (Also known as Expenses for Business Use of Your Home): This form deducts eligible living costs, including rent and utilities, as business expenses.Form 4562: A document used to report the amortization or depreciation of property or automobile used for the business.Form 8283: A claim for a deduction on non-cash charitable gifts that a small business made exceeding $500.Form 7004: This form requests a deadline extension to file taxes. Again, these can be filed electronically or sent by mail. Help Is Available for Small Business Owners Manual payroll processing can be time-consuming for small business owners, and many are now considering alternatives to manual payroll systems. In a global marketplace of heightened competition, inflationary pressures, and advancing technologies, it can be challenging for entrepreneurs to take on the task of accounting. This can also result in errors since preparing and filing taxes can be challenging to complete. While every small business can manage and submit necessary tax information, other options exist, such as leveraging automated software solutions or outsourcing work to a professional and certified accountant. If you're interested in automation as an alternative, we recommend browsing these payroll software articles and reviews to get you started.
In-House Payroll Software vs. Outsourcing: Choosing the Best Approach for Your Business

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In-House Payroll Software vs. Outsourcing: Choosing the Best Approach for Your Business
Payroll processing is essential for employee satisfaction, ensuring both accurate and timely payments. There are many factors to consider when deciding whether to outsource your payroll or keep it in-house. Both models have pros and cons, so it's essential to evaluate your options carefully before making a decision. Let's dive deeper into these payroll solutions and uncover their benefits. In-House Payroll Software & Its Benefits In-house payroll refers to the process of managing employee payments within the boundaries of your company. This is usually done with the help of a software solution that automatically calculates employee compensation and delivers it to the HR team. Once you've set up the payroll software, it automatically computes all calculations for you. Streamlined payroll processes save time so the HR department can work on other projects. Here are a few of the main benefits that in-house payroll software offers: Flexibility In-house payroll systems offer more control and flexibility than outsourcing. In most cases, you can tailor the software to your company's specific needs and preferences. Additionally, you can decide when and how often employees are paid and which benefits they're entitled to without having to trust a third party with your information. Reliability Another advantage of in-house payroll software is that you control the entire process. This means you can be sure that your employees will be paid on time and that their personal information will be kept safe. Moreover, you won't have to worry about data breaches or other security issues, as all the information will be stored on your own servers. Easy Tax-Compliance In-house payroll systems can also help you comply with tax regulations more easily. This is because the software automatically calculates the correct amount of taxes that need to be withheld from each employee's paycheck. Additionally, the system can generate reports that help you keep track of your company's tax obligations. This way, you'll always keep abreast with the latest tax laws. Payroll Outsourcing & Its Benefits It's common to outsource payroll services in 2022. Payroll outsourcing refers to partnering with another company to manage your payroll responsibilities. Usually, this is a company consisting of financial experts that make the calculations and payments for you while keeping you up to date with the process. After you've partnered with a third party to manage this for you, you'll have to give them access to your company's data, like hourly rates, timesheets, tax deductions, and employee benefits. From there, they'll create a dedicated team to manage your payroll responsibilities. Let's take a look at the benefits of this payroll management model. Easy Setup and Low Maintenance Payroll outsourcing is often considered the simpler and more convenient option, especially for small businesses. This is because you won't have to invest in software or hire extra staff to manage the process. Instead, you can simply outsource the entire payroll function to a third-party provider. This way, you can focus on important aspects of running a business, like acquiring new clients and running marketing campaigns, while the provider takes care of employee payments. Timely Paid Taxes Another benefit of payroll outsourcing is that you can be sure that your taxes will be paid on time. In most cases, providers offer tax-filing services as part of their package. This means they will calculate the correct amount of taxes that need to be paid and file them with the appropriate authorities, ensuring that you remain tax-compliant. Accuracy When you outsource your payroll, you can be sure that all the calculations will be done correctly. This is because most providers use sophisticated software to calculate and track employee compensation. Additionally, they often have a team of experts who double-check the calculations before making payments. How to Select the Right Model for Your Business Outsourcing payroll can save you time and money, but it can also be less reliable than an in-house solution. On the other hand, in-house payroll software is oftentimes more complex and time-consuming to set up, but it offers much more control and flexibility. So, which is the best solution for your business? It depends on your specific needs and preferences, but oftentimes, an in-house payroll software solution is the better option. Both models offer a wealth of benefits, but in-house software never requires you to surrender your data to a third party. This is especially important, considering your company will be held accountable if a data breach happens and not the company you partnered with. What This Means for Your Company Although payroll outsourcing can be an excellent option, having an in-house software solution handling most of the difficult work for you might be better. With it, the HR and finance departments can abandon manual payroll operations, as they will be fully automated. As a result, personnel have more time available to focus on other important tasks like increasing productivity and growing the company. If you're considering investing in such software, check out our reviews of the best payroll software.
Do HR Functions Still Outsource Their Payroll Services in 2022?

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Do HR Functions Still Outsource Their Payroll Services in 2022?
Business owners are well-aware that managing a company's payroll is no easy task. After getting the job done, employees expect to be adequately compensated. However, owners know that payroll management doesn't just refer to their salaries—it also consists of other inherent responsibilities, like handling employee benefits, paying taxes, managing withholdings and deposits, and more. This makes managing and tracking worker compensation very challenging. Outsourcing and Automated Payroll Solutions For this reason, more and more companies resort to outsourcing their payroll to third parties. In the last few years, business owners have started seeing the value of outsourcing their payroll responsibilities and not having to worry about the correct compensation of their employees. In addition to payroll outsourcing, some companies are also opting for automated payroll solutions. In fact, the rise of such solutions is starting to become a problem for manual payroll systems, as automated ones are often cheaper and more precise. Now, let's dive deeper into the world of managing payrolls and see what it's all about. Value of Payroll Outsourcing in 2022 Getting your company's payroll managed by a professional brings significant value to the table. Here are some of the main benefits: Outsourcing Saves You Time One of the main advantages of outsourcing payroll services is saving companies valuable time. In 2022, running a business consists of many aspects: managing sales, running marketing campaigns, keeping clients satisfied, and developing new products. With their payroll operations outsourced, business owners can have more time to focus on these aspects without worrying about whether total payments were calculated correctly by the end of the month. Outsourcing Is More Accurate Payroll outsourcing doesn't just bring value because it saves time—it also drastically reduces the risk of errors (i.e., improperly calculating employee compensation by the end of the month). In addition to keeping employees happy, this helps you remain tax-compliant, as the right payroll solution will also calculate taxes for you. Outsourcing Can Potentially Save You Money Outsourcing your payroll responsibilities can save you more money than it costs. Most business owners try to avoid having too many subscriptions, as it costs them large sums of money in the long run. However, an outsourced payroll solution can potentially cost you less than if you were to calculate the payroll yourself. Furthermore, having to face a penalty that results from making a mistake isn't something that any business owner should face, which is why outsourcing payrolls might save you money. Disadvantages Associated With Outsourcing Payroll Although payroll solutions have positively affected the way businesses handle spending, they aren't without their flaws. These are some of the potential disadvantages of outsourcing: Lack of Accountability The first disadvantage of outsourcing services is accountability. Even though you'll leave payroll management in the hands of professionals, you won't know if they've done a good job until it's too late. Moreover, the company you outsourced your payrolls to won't be held accountable for a mistake—your company will. Vulnerability Keep in mind that you're also putting the integrity of your data at risk when using the services of a third party. This is why it's crucial to establish confidentiality when you start outsourcing payrolls, as confidentiality threats could permanently stain your company's reputation. Ultimately, this makes your company vulnerable, so it's crucial to use a payroll solution with an impeccable reputation. High Costs Involved Lastly, it's worth noting that small to medium-sized businesses might not have any cost savings using an outsourced solution. The cost of payroll outsourcing can be quite high, and businesses that aren't in the top earning brackets might not be able to handle such costs. The reality is that outsourcing your payroll operations isn't cheap, so unless you've got a complex financial structure, chances are you won't save any money. Payroll Automation as an Alternative Solution It's evident that outsourcing payrolls has both advantages and disadvantages. While it may be a great decision for larger businesses with thousands of employees, the facts say that small to medium-sized businesses probably won't benefit from payroll outsourcing. This is precisely why automated payroll solutions for your designated payroll team have been drastically growing in popularity, as they offer the same benefits of payroll outsourcing with fewer shortfalls. Should you be interested in adopting a payroll software solution, look at our articles on the best HR automated software for small businesses and our reviews of payroll software for more information. Which Solution Is Best for 2022? As of 2022, having an automated payroll service is usually a better option than outsourcing your payroll. This is because a streamlined automated solution saves you time while being much more accurate and customizable. The pandemic has shown us that we need transparent payroll processes with remote access, which are essential to keep employees engaged and loyal.
What Is HRIS and How Can It Benefit Your HR Function?

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What Is HRIS and How Can It Benefit Your HR Function?
Human resources information systems (HRIS) are primarily used to collect, store, and adequately manage employee data in a company. In the vast majority of cases, however, this system does more than work with employee data—it also serves as a system for managing new recruits, tracking performance, and steering the company in the right direction. With the basics out of the way, let's dive deeper into HRIS and uncover how it works. HRIS Explained An HRIS is a software solution that eliminates the need for manually managing human resources. A solution like this is often used to store and manage employee records, like their performance, history, and compensation. With technological advancements, HRIS solutions have become much more sophisticated, offering complex features like new talent acquisition, tracking efficiency, and keeping pace with new trends in the workplace. The main goal of a software solution like this is to help HR teams meet their company's strategic goals. With the right HRIS solution, companies have a clear overview of employees' skills and performance, helping them advance in their careers while driving efficiency in the workplace. Common HRIS Functions Most HRIS solutions offer the same basic functions, though additional features can be added to cater to a business's needs. These are the most common functions required by an HRIS solution: Attendance Tracking After the COVID-19 pandemic, tracking attendance became much more challenging. This is because many companies started to offer remote positions, so tracking attendance was no longer limited to swiping an employee card. If you're having difficulty managing attendance, it's advisable to look into the best software for employee time tracking to simplify the process. Applicant Tracking System (ATS) A good HRIS solution can help HR teams get a better overview of their applications. Using some of the best hiring and onboarding software apps will give you access to preliminary screening and even background checks. Benefits Administration HR managers are tasked with managing and tracking workers' compensation. However, employees' benefits aren't limited to their compensation alone. They could also include health insurance, gym memberships, and mileage reimbursements. Employee Self-Service More and more organizations are starting to benefit from their employees managing their requests without requiring direct supervision. The right HRIS software allows an employee to request a paid vacation or sick days without having to directly discuss the matter with the HR department. This lessens the burden on the HR department while simultaneously increasing employee satisfaction. Payroll It's no easy feat to issue paychecks when managing a large team of employees. With a suitable HRIS, you'll have a software-automated payroll process, ensuring that every hour of work is paid. Performance Management Many companies confuse attendance tracking with performance management, but the truth is that they're very different. For example, a frequently absent employee could, in fact, be more productive than an attendant one but be compensated less due to having fewer hours in the workplace. Having an HRIS solution helps the HR department distinguish this line, ensuring that well-performing employees are adequately compensated. Reporting & Analytics Managing reporting and analytics with HRIS software usually refers to automated HR reports on relevant employee data, like their performance or absence. Such a system can help the HR team make better decisions based on these reports. Succession Planning Sometimes, people leave the workplace for alternative employment, which is why having an available replacement is crucial. An HRIS can help your company find a replacement quickly if an employee leaves. Training Training is essential to steer a company in the right direction, especially regarding new talent. An HRIS solution often entails having a learning management system with featured e-learning and courses. Benefits of HRIS for Human Resource Managers These are the main benefits HR managers can expect from an HRIS solution. Increase in Productivity The main benefit of an HRIS is the increase in productivity it offers. A key example is streamlining payroll processes to save time. By automating everyday tasks and functions, HR departments can focus on more important tasks and enjoy improved productivity. Improvement of Operational Performance Not only will HRIS software improve productivity in the HR department, but it will also boost operational performance. If an HR team has better overviews and access to data, it can make better decisions for the company. Streamlined Compliance Management A successful HRIS ensures that all employee data is adequately managed and stored due to improved reporting and analytics. This can help you avoid any compliance issues. Data-Driven Decision-Making Another significant benefit of an HRIS solution is that it allows for data-driven, accurate decision-making. With all the data stored in one place, HR teams can make better decisions and develop new strategies based on facts and figures. Enhanced Employee Satisfaction HRIS software streamlines and automates many administrative operational processes. Employees are able to quickly and easily make requests, which fosters greater employee satisfaction. HRIS: Beneficial to All A strategic and successful HRIS solution offers substantial benefits to both the HR department and employees. By automating common tasks and processes, HR personnel can enjoy improved productivity and focus on more important job duties. Most importantly, they can focus on what really matters in the company—the people.
Setting up Online Payroll: 6 Top Tips for First-Time HR Managers

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Setting up Online Payroll: 6 Top Tips for First-Time HR Managers
As a first-time HR manager, setting up an online payroll system for the first time can be daunting, especially if you have numerous employees and contractors. The following tips aim to streamline this process and alleviate some of the stress of setting up a new payroll system. 1. Get a Federal, State, or Local ID Number All employers in the United States must have an Employer Identification Number (EIN), which you can apply for through the IRS. You may also need a state or local tax ID number, depending on your state and locality. Check your state's website to determine if you're required to get an EIN. These ID numbers are used to report and file employee and employer taxes with federal, state, and local governments. When signing up for an online payroll service, you'll be required to enter this information before you can pay employees. 2. Gather the Right Employee Information Before Their First Day Before you can pay any employees or contractors, you'll need to request some information. For employees, you'll want to have them fill out Form I-9 and Form W-4. The I-9 is a form to verify the employee's eligibility to work in the United States, while a W-4 provides you and the government with the employee's tax information, such as their name, address, and tax ID number. You'll want to ensure you have all this information before the employee's first day to avoid any tax withholding discrepancies and possible penalties. 3. Classify Your Employees Workers must be classified as independent contractors or employees for tax purposes. Independent contractors do not have taxes withheld, and you don't pay employment taxes on amounts earned by contractors. If you classify an employee incorrectly, you may owe the government back taxes, interest, and penalties. There must also be a classification among employees as either exempt or non-exempt. The Fair Labor Standards Act (FLSA) mandates that non-exempt employees receive a minimum wage and an overtime rate for any hours over 40 in one week. Some states have regulations for non-exempt employees in addition to the federal government's FLSA. 4. Choose a Pay Period You must pick a day to pay your workforce, but you'll want to select a day that works for everyone. When choosing a pay period, there are several considerations, like state requirements, cash flow, and employee needs. Some states have minimum frequencies for pay dates, such as monthly or bi-monthly. You will also want to ensure you have the cash to cover the payroll expense on your chosen dates. And finally, your employees may desire a biweekly rather than a monthly pay period so they won't have to wait so long between paychecks. 5. Develop And Distribute a Payroll Policy Once you have familiarized yourself with the above information, you'll need to relay that to your workers. Your payroll policy should be in writing and available for employees to reference as needed. A payroll policy includes compensation rates, paid time off, payroll tax information, pay period start and end, and pay dates. Developing a payroll policy helps reduce errors, ensure that payroll is run on time, and that you're compliant with all applicable regulations. 6. Utilize the Right Software There is no shortage of management software intended to make the lives of business owners and managers easier. Make sure you take a look at the best payroll software and the best HR software for small businesses. Bottom Line Before setting up your payroll system, you must have certain information or documentation ready. As indicated above, you'll need an EIN from the IRS and possibly from your state. You should also know your company's bank account information and the signatory's details. If you migrate from another payroll system, you'll also need historical payroll data and unpaid tax liabilities. Gathering this information prior to setting up your payroll system will streamline the process and ensure a successful experience.
How to Manage & Track Workers' Compensation (6 Simple Steps & Tips)

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How to Manage & Track Workers' Compensation (6 Simple Steps & Tips)
Workers' compensation will pay employees' medical costs and wages lost due to a workplace injury. Mismanagement of workers' comp claims can result in a great deal of financial and legal trouble for your organization. Effective management and tracking of workers' compensation claims can save your company considerable amounts of time and money. That being said, read on to learn exactly how to manage and track your workers' compensation claims with these easy steps and some expert tips. 6-Step Workers' Compensation Guideline for Your HR Department Your HR manager should take the following steps for every workers' compensation claim: 1. Employee Reports Work-Related Injury Should an employee injury occur, the employee must report the incident to the employer as soon as possible. Immediate reports facilitate faster claim resolution and limit legal risk and potential fraud. 2. HR Manager Files First Report of Injury (FROI) The employer should complete and file the First Report of Injury (FROI) to the workers' compensation insurance carrier. OSHA regulations mandate that certain injuries are reported within a specific period, and many states charge fines and penalties for reporting delays. 3. Insurance Claim Is Filed & Incident Investigated Once the insurance carrier has received the report, the insurance company will perform its own investigation of the incident. The company will look at medical records and collect statements from the employee, witnesses, and the person who received the incident's initial report, looking for any indication of fraud. 4. Claim Is Accepted or Denied With the evidence gathered during the insurance carrier's investigation, the insurer will decide to accept or deny the workers' compensation claim. 5. Development of Return to Work Plan The insurance claims adjuster and the employer's HR department work together to develop a plan for the employee to return to work based on the report provided by the employee's physician regarding their capabilities. If possible, the employer may make accommodations for the employee to return to work. 6. Settlement of Claim With Employee Return The claim is closed when the employee has healed from their injury, has been released from their physician's care, and has fully returned to work. Tracking the Workers' Compensation Claim Once Filed Your HR department can efficiently track workers' compensation claims after filing with the help of automation. Workers' comp software can assist with filing injury reports, document management, compliance, and claims workflow management. Some even offer injury and claims cost analytics to help you identify areas that may require safety or process improvements. When comparing workers' compensation tracking software, consider the following features: Payroll integration Workers' comp tracking software that integrates with your automated payroll software means less data entry and fewer errors. Organization and reporting tools The software should be able to be filtered by various factors such as department or claim status to create detailed reports. Ability to accommodate complex scenarios It may be necessary to manage workers' comp claims across different states or worksites. The software you choose should be able to handle this complexity. Ability to produce high return on investment The investment in the software should not be more than the amount of money saved through reduced claims or time spent managing workers' comp. Understanding Experience Modification Factor Your workers' compensation premiums are based on your organization's MOD, or experience modification factor. MOD is a formula used by your insurance carrier to determine the amount of premiums they'll charge your organization. The formula takes into account the amount of actual workers' comp losses your company has incurred, based on your company size and industry, and expected future losses. The MOD formula outputs a factor around 1.0. If your MOD is less than 1.0, your losses are better than expected, and you'll get a discount on your workers' comp premiums. A MOD above 1.0 indicates losses are worse than expected, and you'll pay more for insurance. Extra Tips for Effective Workers' Compensation Management Promote Workplace Safety You can promote workplace safety by providing your employees with the proper training, keeping a clean workspace, posting signs, and regularly reviewing safety procedures with your team. Reminding your employees to work safely will reduce the risk and number of injuries. Act Immediately After Injury If an injury occurs, acting immediately can save money on fines and penalties for delayed reporting and eliminate the possibility of fraudulent claims. Conduct a Thorough Investigation A thorough investigation of the accident as soon as it occurs will identify any immediate dangers to others. Documenting the situation can help with filing workers' comp claims and protect you from false claims. Control Drug Costs (If Possible) One of the most effective ways to reduce drug costs is to replace brand-name drugs with generic drugs. A pharmacy benefits management program can help negotiate better prescription drug costs. Evaluate Post-claim Expenses Continually assess for ongoing medical expenses for injuries, such as costs of physical therapy or specialty physician visits. Remember that certain injuries may have latent effects on the body, which may not appear until months or years after the original injury. Beware of Claims Fraud You can combat the likelihood of claims fraud by implementing a zero-tolerance policy for false claims, establishing ways for employees to report fraud anonymously, and installing video surveillance in work areas. Bottom Line: Take Control of Your MOD Factor Even though you cannot determine your own MOD score, you should take the necessary steps to influence it. Since MOD is basically a safety score for your company, improving your safety programs to lower the number and severity of workers' comp claims will, in turn, lower your MOD factor, thus reducing workers' comp losses and insurance premiums.
The Fundamental Differences Between HCM & HRM Explained

Hr function

The Fundamental Differences Between HCM & HRM Explained
Human Capital Management (HCM) and Human Resource Management (HRM) share many similarities, yet the two are very different. Both support the HR function in the daily responsibilities of managing the workforce to create a more effective organization. For example, HCM and HRM are both interested in hiring, training, and retaining the best talent, but they differ in the way they approach the task. Keep reading to learn more about the difference between HRM and HCM in order to make the best choice for your organization. What Is Human Resource Management? The notion of HRM emerged before HCM. As personnel challenges, such as compliance and employee relations, increased, so did the need for a more effective management process. HRM predominantly focuses on the organization's immediate needs—the day-to-day administration of employee-related tasks such as the following: HiringOnboardingTrainingTime and attendancePayrollBenefits administrationRecords managementCompliance HRM aims to hire and retain employees with the skills necessary to help the organization succeed. An organization can achieve this goal by developing recruiting and training practices that equip the right people with the right skills and through proper management of the employee-employer relationship to maximize employee productivity. What Is Human Capital Management? The term HCM appeared after HRM but is much broader and encompasses all aspects of HRM. HCM's primary focus is the organization's long-term needs—how to utilize its human resources in a way that provides the organization with a return on its investment. HCM uses data provided by HRM activities to guide top-level management in strategic business decisions. HCM may involve responsibilities such as the following: Assessing the organization's skills needsDeveloping new roles in the organizationCreating an employee/team structureDesigning compensation and benefits plans that will support the retention of employees Key Differences Between HCM & HRM While HCM and HRM both focus on managing human resources, they differ notably in their objective. Goals The goal of HCM is economic: to maximize the efficiency of the organization's workforce in order to provide a return on investment of that capital. In contrast, HRM's objective is administrative: to hire and retain an efficient workforce. Roles HCM and HRM are involved in the process of recruiting, hiring, and onboarding, each with different roles. The role of HCM is to assess the organization's needs—creating a new position, if necessary—and recruit talent with the desired skills and abilities. HRM's role is to design and manage an efficient hiring and onboarding process for the recruited talent. Training Training is another HR responsibility where HCM and HRM have roles, yet they approach the task differently. HCM broadly defines the required skills employees need to benefit the organization. HRM, on the other hand, designs and manages suitable training plans for the workforce and then measures the success of that training. Choosing the Right Approach for Your Business There is no right or wrong approach to the management of human resources as each provides its own unique value to your organization. It would help if you began by identifying your organization's current challenges and expected future needs. Some smaller companies find that their main challenges are in the daily management of their workforce, while larger organizations' needs are much broader. Regardless of which approach you choose to implement, everyone in your organization should agree and understand what is expected of them to ensure success. HCM and HRM are not mutually exclusive; both are employee-centric and focus on maintaining a workforce that benefits the organization. Additionally, there's nothing stopping you from combining the two approaches within your organization to produce fantastic results. They are simply established management approaches that aim to help organizations identify and implement the goals they need and are not infallible.