When payroll is the greatest expense on your profit and loss statement, you can’t afford to make mistakes. From managing payroll on spreadsheets to misclassifying employees, the margin of error is high. And the consequences can be expensive, especially if you’re managing payroll on your own.

Managing employee payroll on your own is admirable. Your employees count on you to deliver benefits and paychecks on time. That’s on top of everything else that comes with running your eCommerce business. So make the most of your limited time and hard-earned money.

Read on for solutions to common payroll mistakes like:

  • Managing payroll on paper and spreadsheets.
  • Misclassifying employees.
  • Inaccurate employee time tracking.

Mistake #1: Managing Payroll On Paper And Spreadsheets

No matter the scope of your eCommerce business, time is money. And if you’re tracking employee hours and jobs on paper, you’re losing both. When you’re deep in the throes of payroll the night before it’s due, a lost note or smudged number can bring the whole system down. And, sure, Excel can support a thousand rows and columns. But that’s a lot of searching, scrolling, and hoping that seven you just typed wasn’t a one.

Payroll and accounting don’t come naturally to everyone, and that’s not a bad thing! But when a task that should be quick takes hours, or even whole days, to complete, that’s when you know you’re in over your head. Tracking on paper and manual data entry is ripe for payroll errors.

Here’s what you can do: Cut the time you spend on payroll down significantly and invest in a payroll solution that does all the heavy lifting and calculating for you. With a more organized and automated system, calculations are always exact, and you don’t lose track of never-ending columns and rows.

Maintaining Payroll on Paper

Mistake #2: Misclassifying Employees

Whether your business uses full-time, part-time, or seasonal employees and independent contractors, payroll needs to reflect it. Correctly classifying employees, according to Fair Labor Standards Act (FLSA) regulations, can help you determine which workers are eligible for overtime pay, the benefits they’re entitled to, and how many hours they can work, among others.

For example: Under FLSA regulations, salaried employees who earn more than $23,660 a year are exempt from overtime pay. Meanwhile, the FLSA doesn’t distinguish between full-time and part-time employees. But if your “part-time” employees work more than 30 hours per week, they may be eligible for certain benefits. Then there’s your teenage son, daughter, niece, or nephew whom you hired to file paperwork in the summertime. Their employment is classified under the FLSA too.

Here’s what you can do: Get to know federal and state labor requirements. And that might require some time with a local labor law expert. Misclassifying employees can lead to labor disputes in the future. So if you’re already worried about the time and financial cost of payroll, remember, even one payroll violation can cost your business thousands.

Mistake #3: Inaccurate Employee Time Tracking

Employee hours are the heart of payroll. But if your employees are still tracking time on paper timesheets, you could be drastically overpaying or underpaying employees—and leaving yourself vulnerable to things like time theft.

When employees are responsible for writing down their hours on paper, they’re more likely to make a mistake and either over or underestimate their time. When an employee underestimates the amount of time it took them to complete a task, it’s known simply as the “planning fallacy,” which is a natural human tendency.

But to your business, when an employee overestimates hours on their timesheets, it’s known as time theft. In either case, the result is the same: If you’re underpaying employees, you’re one step closer to a wage and hour lawsuit. And if you’re overpaying employees, you’re losing money.

Here’s what you can do: Switch from paper timesheets to an automated, mobile time tracking system. With a mobile and automated system, you know employee time is clear and accurate, so you pay your employees for every second worked. And if you opt for a GPS-enabled system, you can keep track of worker locations. Not only will that curb time theft, but it can keep workers safe and accounted for when they’re on the road or working on a site.

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