One of the main reasons why every business owner should maintain their payroll history is because they help in maintaining and avoiding mistakes in your business records. For someone not aware of the term yet, it is basically the method through which you create and maintain a record of the earnings, taxes and deductions of each and every employee every time you run the payroll.
In short, the past payroll records or payroll history of a company consists of information about an employee’s compensation, earnings, timecards, payment information, taxes and accruals. This means that one can review their paycheck history using their pay period, a specific month or on a quarterly basis.
Why Is It Important?
Maintaining payroll history is not as easy as you think as it is basically a compilation of old records. Payroll history is used to answer the questions of your employees, process payroll forms, payroll systems transfer and for accounting books updating. Since the importance of payroll history can never be denied, more and more business owners are nowadays outsourcing their payroll service in Sydney.
1. Answer Your Employee’s Questions With Payroll History
There are a few situations when employees have issues regarding their previous pay. They might be willing to know about their taxes or the year-to-date pay. Just checking the payroll history will let you answer all your employee’s queries as you can find them in the past paychecks of your employees. If you are willing to save your time, you can even set up a self-check portal where your employees can check their payroll histories without your intervention. All they need to do is to log into their accounts and get all your queries solved.
2. Stay Away From Accounting Errors
Unless you have years of experience in maintaining accounting books, there are high chances for you to make payroll-related errors. One of the easiest ways to stay away from accounting errors is by sourcing the task of maintaining your payroll history to a reliable company in Sydney. Take both your accounting books and payroll history into account and ensure that their total matches up. The same numbers should be recorded for both the taxes and pay. You will come to know where the error is if a certain number doesn’t match.
3. Helps When Setting Up A Payroll Software
There are a few situations when a business owner wants to change the method using which they used to run their payroll earlier. The best they can do is to install a new payroll software or change the one they are using. Payroll history becomes necessary when you are setting up the account. If you can’t provide an updated payroll history, you won’t be able to run your payrolls any further. The payroll software provider needs it to calculate your taxes and wages.
Since payroll history is so important, it’s time you outsource your payroll services and ensure the safety of your business records.