Start-ups seem to be the flavour of the season. The digital platform has provided so many people to realise their dream of starting their own business. It cannot be credited to just the availability of a digital platform, but also to the number of people who are following their instincts, passion and dreams in a gutsy manner. Start-ups come with huge potential of changing the market scenario, but at the same time they need a helping hand to guide them. This is where software like HRIS, payroll management etc come in to place and help them grow into bigger companies.
Everyone knows that start-ups function in a very different way as compared to a huge corporate. They break the regular rules of work culture, approaching a problem and the like. However, there is one area where a start-up faces constant challenges and cannot compromise with at any stage – Money. Most of the start-ups have limited funds to start with and they cannot risk the investment and not complying with payroll laws can invite some serious legal actions, which may drive them out of business altogether. Thus, start-ups need to tread this road very carefully. These are three of the most common mistakes pointed out by best payroll management software companies in Delhi that start-ups need to avoid making.
1) Mixing personal and business finances
This is one of the biggest mistakes that the founders of a start up can make. In the initial stages, the founders end up spending on something from their own pockets thinking it would be good for the company. They feel that it doesn’t matter if they are paying the employees and contractors from their personal finances as long as the work is getting done. While it may seem convenient in the initially, but it can lead to dire situations in the long run. There will be no accountability for some expenses and there may be problem during filing taxes. If this is uncovered in some audit, the start-up would be serious trouble. Separate the two and let the payroll software manage the payment details, whether it is paying your employees or some vendors.
2) Classifying employees as independent contractors
Agreed, the strength of the start-up would be low. That does not mean that one classifies employees as independent contractors. Most founders do it as they would not have to pay taxes, insurance, overtime cost or medical benefits to independent contractors. Handling the finances of the independent contractors seems simpler than the way one has to approach paying the regular employees. It may sound very tempting but misclassifying employees directly call for legal troubles. The best payroll management software companies in Delhi suggest that making a clear demarcation between the regular employees and independent contractors on the software will handle the finances accordingly. If eventually the independent contractors convert into employees, then the change can be accurately and easily done on the payroll software. Just a few edits need to be done with some clicks on the mouse, instead of going the manual way.
3) Maintaining Payroll records manually
Since the size of the start-up may be small initially, a lot of founders assume that they can maintain the payroll details manually. After all, how difficult can be to track the payment details of a team of under 10? Well, firstly the team will not remain small forever. As the team expands, maintaining the details will get tricky if it’s done manually. Secondly, there may be constant changes in the team and updating the same on the payroll may get really frustrating. Unlike the corporate, the team members will be undertaking a lot of responsibilities at once. The responsibility of maintaining paperwork and manual records is an unnecessary task. Implementing payroll software instead will efficiently handle all these. Lot of time and effort would be saved, which can be utilised into doing better things like devising strategies and growth plans of the start-up.
If you are entrepreneur with a new business under you, then get in touch with HR-One who will help you fine-comb your payroll details. Let payroll software take care of your money and payroll issues, while you can concentrate on other aspects of business to grow and gain a strong foothold in the market.