How To Build a Payroll System for Your Small Business

A small business often needs to spend a lot of time and effort establishing itself, which can include setting up some of the basics that many new business owners will overlook at first. The payroll system is a great example – while every business needs one, many new companies struggle to create one quickly.

If you are part of a newly-formed small business looking to build a payroll system that works, then it’s important to think ahead and prepare appropriately. Payroll systems can be complex, but they are also necessary to make your small business feel legitimate.


Construct the Basics

Payroll can initially seem incredibly complicated, but a large part of the work is just getting the process set up and running. Over time, you can refine how your business pays employees, streamlining everything further to ensure that you are always getting the results you need.

You need to have basic versions of things like a pay calculation method, a payroll entry system, and consistent payroll documents. While it can take some time to set these all up properly, they are all one-time additions that can remain effective for quite a while. In general, you only need to improve your payroll system when your business grows too large for your current system to work.


Focus on Software

Software is the core of any payment system, and the right payroll processing software can significantly impact how your business pays employees. With that in mind, it is often a good idea to focus on the software side first and foremost, even if you are on a very tight budget.

Many payroll systems are centred entirely around one or two main pieces of software, which often do the bulk of the work for you. By using carefully-chosen software and online tools, you can effectively cut down on a large portion of the work. A good example is generators for creating pay stubs, which allow you to produce paystubs quickly and easily on any scale.


Record Information Clearly

You can’t make accurate payments without accurate data, so be sure to store important information as clearly and consistently as possible. You want to keep all relevant information easily accessible and properly formatted for your payroll system.

This includes things like employee data, payment information, each employee’s schedules and working hours, and anything else that you would need to feed into the payroll system and documents. By logging everything correctly, you can guarantee that the information is right where it needs to be.


Keep Backups

Setting up a proper system for keeping backups of important data can be an extremely important step toward getting a payroll system that works. Even if this is just a secure server folder or an online document backup platform, you want to know that you can fall back on safe copies if any information gets deleted or lost.

Back everything up – and don’t ignore the potential benefits of creating templates, format guidelines, and other training materials as needed. The more you can do to keep your payment system consistent, the better.



Mark Munroe is the Creator and EIC of ADDICTED. He's ADDICTED to great travel, amazing food, better grooming & probably a whole lot more!