Figuring Out Payroll
FIGURING OUT PAYROLL
A person has to do what it takes to survive, unless you own a business of course. Then you have to do what it takes for you to survive along with your employees. How do you make sure that you have enough to make it while also making sure your employees are taken care of? It’s a difficult system to create with payroll being such a regular expense with so many requirements surrounding it. Even if you outsource it to a company like Vision H.R. that handles Daytona Beach, Ormond Beach, and Deland, and Deltona Payroll services, you still have to decide how much of your revenue to dedicate to payroll, and how to schedule your employees. The final decision isn’t just how much can you pay your employees, it’s also how productive you want your employees to be.
A satisfied employee is a productive employee. Incentives keep an employee working hard, which doesn’t always mean giving them extra. Just giving them a decent wage and decent hours will keep most employees happy. When an employee is being productive, he is making your company more money. They are getting more sales, creating more product, helping more people, giving you a greater return for your investment in them. So when it comes to managing payroll, you need to make sure you can afford to keep them working using the basic cost vs. result formula, (cost of wages and expenses of an employee vs. the revenue made from their work) it’s imperative to make sure they are also in a spot that they will not lose productivity.
This is why you need a payroll model that has a sound foundation yet has room to adapt as needed. There are different business models that many people use to decide their payroll. Some stick to a direct sales percentage, meaning they use a certain percentage of their overall sales to pay employees. For example, they decide they will use 16% of their sales to use for payroll. If they made $250,000 in sales that year, $40,000 of it will be used for payroll. Other companies follow a pure adaptive business model based on what work is needed to be completed and how much revenue is expected to be received from it.
A few larger companies can tend to break payroll down even further, planning schedules and pay scale for different jobs. For instance, in a retail store a cashier may be more needed than a stocker, so more of the payroll will go to the cashiers. Other companies try to keep wages the same regardless of position, adjusting wages according to time spent with the company and the work done instead of the need of a position.
With all these possibilities, it can be difficult to determine which business model of payroll is best for your own business. While Vision H.R. can not make the final decision, they can use their knowledge of payroll along with their experience helping numerous other clients in helping to decide the best way to do your payroll. If you just started your business, or are looking at restructuring your payroll, make a smart choice and get a free quote from Vision-hr.com.
