How do NetSuite Customers Benefit from On-Platform Payroll?

Time-sheet tracking and Payroll can be time-consuming and complex tasks for any business. Even small business customers using a business management platform such as NetSuite can benefit from on-platform payroll software to help process and record employee benefits, taxes and payroll. 

Creating a plan to process payroll that benefits both employers and employees 

Efficient and accurate payroll solutions, such as Infinet Cloud protect employee’s benefits, ensures they are paid correctly and plays a key role in overall employee satisfaction. Important benefits including allowances, penalty rates and superannuation should be calculated and managed through payroll to ensure that errors are minimised. 

Businesses must comply with labour laws and payroll tax requirements, which can differ between states. In addition, these requirements are also subject to frequent change, which means manually calculating payroll or using off platform solutions doesn’t ensure that your business is paying your people as per the most current legislation. 

Non-compliance penalties from the ATO and other tax agencies can be severe, and labour law violations can lead to problems with business administration bodies and even legal action being taken by employees. Payroll software like Infinet Cloud, can help you stay up to date with the changing regulations and processes, and ensure an accurate and legally compliant payroll.

Efficient payroll management helps businesses optimise cash flow and performance. Payroll is usually one of the biggest recurring costs of a company. You need sufficient working capital or cash flow to meet your obligations in each pay period. Understanding your payroll costs will also help you to manage your workforce more efficiently. The goal is to have enough resources to get the job done correctly, without wasting money on unnecessary labour. But you also need enough cash on hand to hire new employees or make additional investments as your business changes and scales.

Key Considerations for Setting Up Payroll in NetSuite

Before you can start paying your employees, we need to set up employee records and payroll configurations to ensure that your payroll calculations and pay runs are a smooth and error free process. We have worked with many customers to help them upgrade their payroll management from both manual, spreadsheet driven systems to off-platform payroll solutions such as Xero, MYOB or Reckon.

Set up a Payroll Schedule

Determine how frequently you’ll pay employees. Many businesses pay employees either weekly, every two weeks (bi-weekly) or monthly. However some states have minimum pay frequency requirements, depending on employment classification such as casual, part time or full time, so before deciding on a payroll schedule, make sure you comply with all regulations. 

Understand Employer Obligations

The Fair Work Commission acts as the overseeing body for payroll related obligations. They have systems in place to help protect employee well-being and ensure employers are adhering to the legal obligations set out by a wide range of awards and EBA agreements. Under new payroll reporting requirements, employers must track and keep records of all employee time worked, pay at least minimum wage (what they would be entitled to based on their job classification under any relevant award), and pay overtime if employees work more than 38 hours per week and are non-exempt. 

If your company hires freelancers or independent contractors, they will also have their own sets of rules and regulations. From the perspective of the ATO, contractors are self-employed, so they are not subject to the same minimum wage or overtime laws, however if the majority of their income is derived from working for your business, there are a number of additional obligations you must meet, such as work-cover insurance.

Abide by Tax Regulations 

Like wage laws, payroll tax regulations exist at the federal and state level. After your employee’s gross pay is determined, you will need to calculate the tax withheld amount from pay cheques and remit this to the ATO in line with IAS and BAS reporting. Dedicated on-platform payroll software is designed to automatically calculate and in most cases, manage the workflow and administration of recording this information, making it easier for you as an employer to stay on top of your tax obligations.

Payroll management software can help you to be more efficient, to better understand the costs of payroll, to maintain accuracy and to ensure compliance with tax regulations.

What’s Included in a Good Payroll System?

The payroll system you set up will need to track employee time, calculate deductions, process payroll taxes and benefits, make payments to employees and submit the appropriate taxes to the ATO. There are also additional more advanced functionality, such as Superstream Connectors and Single Touch Payroll reporting that needs to be considered, and where possible, automated.

Infinet Cloud for NetSuite is a Comprehensive Payroll Solution Build on the NetSuite Platform

At a high level, Infinet Cloud offers customers:

Time Tracking

Infinet Cloud gives you an established time-tracking system for your hourly employees.  Consider factors like overtime pay and time-off requests. Infinet Cloud can help automate and streamline these processes.

Wage Calculations

Infinet Cloud will calculate wages or gross pay by using the hourly rate and the number of hours worked. And for salaried employees, their annual salary will be divided by the number of pay periods.

Tax Withholding Calculations

Infinet Cloud will calculate the correct tax obligations using information that is configured into the employee record. It can also streamline the process of making payments to the ATO and keep records for compliance purposes. It can also process deductions for wage garnishments, if necessary.

Other Helpful Features

On-platform payroll software, like Infinet Cloud exists in your central business management platform, NetSuite, which means recording and reporting as well as solving other common payroll and financial challenges is much easier than attempting to synchronise information across multiple systems and databases.

Payroll as a Service

Keeping up with changing payroll practices and regulations is a common payroll challenge. One solution is to work with Payroll BPO specialists, such as TeamBlueSky or to hire a payroll management specialist. If you’re running payroll manually or are using a payroll software solution, the role of payroll manager may be a full-time job. And even if you’re outsourcing payroll, a payroll point person can help oversee the process.

Payroll BPO Specialists Take Responsibility for the following:

• Setting up and maintaining employee records
• Checking time sheets
• Training staff on time sheet entry processes
• Processing payroll
• Deducting benefits contributions
• Ensuring payroll tax compliance
• Understanding and following wage laws
• Paying all necessary taxes
• Submitting payroll reports to the ATO and other government entities
• Keeping all required and helpful records
• Respond to employee payroll inquiries

TeamBlueSky's payroll managers improve inefficiencies in the payroll process. And they work closely with your accounting team to develop strategies around workforce management to improve your business' financial health.

At what point should a business explore Payroll BPO? 

In short, when payroll becomes a headache and starts to impede on other projects or business operations, it's time. If you start to have payroll errors or you’re struggling to keep up with rules and regulations, consider hiring an outsourced specialist. And as your business continues to grow, you can consider expanding the scope of your BPO team, or look to create a dedicated payroll team internally.

10 Payroll Tips for Small Businesses

The following 10 tips can help your small business manage payroll successfully.

1. Get your budgets in order. Set a payroll budget and estimate how much payroll will cost. Add another 15% to 20% on top of an employee’s base pay to account for taxes, benefits and other payroll fees. Understanding your business’s cash flows will help keep your finances healthy and help ensure you have enough cash to pay employees on time.
2. Become familiar with payroll laws and obligations on a federal, state and local level, and always stay on top of changes. Non-compliance can lead to severe penalties.
3. Educate yourself about your business’s ATO payroll tax obligations, plus any state and local tax requirements. Like labour laws, these are subject to change, and penalties can be severe.
4. Keep careful track of all payroll tax payment and reporting deadlines. Payroll taxes must be filed with the ATO by certain dates, otherwise you’ll incur penalties that increase according to how late your tax payment is.
5. Know which payroll records you need to maintain to adhere to ATO and Payroll Reporting requirements, and how long you need to keep them.
6. Always classify workers correctly. Employees file a tax declaration form, which is used to determine how much money to withhold for federal income taxes for their personal scenario, including garnishing and other repayment obligations, such as HECs. 
7. Don’t put off using a payroll software solution; managing payroll is faster, easier and more accurate with a system that can simplify processes.
8. Make sure your payroll solution meets your needs. Identify important features and make sure they’re configured correctly to support your business goals.
9. Invest in on-platform Payroll solutions, such as Infinet Cloud. This makes it easier for small business owners to view the big picture, including how payroll affects cash flow.
10. Always double check data entry, even if you’re using payroll software. Time sheets, payroll calculations, benefits calculations, deductions, time-off requests, ATO forms, and any other payroll documentation must be accurate, and double checking your work can help you avoid costly mistakes.

How Software and BPO Services Can Help Small Businesses with Payroll

Managing payroll can be one of the most tedious and time-consuming aspects of running a small business, given the repetitive details and need to keep up to date with changing wage and tax laws. 

However, payroll software can greatly increase efficiency and help reduce headaches through automation. For example, payroll software can:

• Accurately calculate pay cheques taking into account all the necessary factors, including wages, tax withholdings, location and benefits contributions. It eliminates manual tallies.

• Calculate overtime, holiday pay and after-hour bonuses if applicable. Whether it’s just to follow company policy or to comply with federal or state regulations, payroll software makes tracking even complex schedules much easier.

• Track time off requests for vacation or sick days. Payroll software can also handle benefits, like the accrual of paid time off that may need to be paid out if an employee leaves the business.

• Stay up to date with tax and wage laws on federal, state and local levels. Save time and ensure compliance.

• Reduce human error. Manually entering payroll information can be time-consuming and prone to mistakes, but automation can handle the detail while enabling payroll managers and employees to focus on more valuable tasks.

Because managing payroll is a critical administrative task that must run accurately and on time each and every pay period, it’s important to set up a system that works for your business. Infinet Cloud and NetSuite together, can greatly improve efficiency and accuracy, while helping your business stay compliant with dynamic and challenging federal, state and local tax regulations. 

It saves you and your payroll managers from getting caught up in the minutiae of overly complex processes. On-platform payroll solutions take your business to the next level. If you are interested in learning more about Infinet Cloud or TeamBlueSky's Turnkey Payroll solutions for NetSuite and J Curve customers, please reach out to our team of experts for a discussion today.