4 Key Payroll Management Reports Managers Cannot Live Without

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Article contributed by Valiant Solutions

As they say, “data is king” – in a world where margins are tight, turnover is a reality, and companies need to maximize profit while minimizing costs, having insight into the workforce data can make all the difference.

Using Payroll Management solutions, the common initial goal is to gain control over the workforce operations and how employees are paid. However, as this control is managed and as they get insight into the information that is being produced, visibility comes to the forefront for making better decisions.

Too often, companies don’t always know what exactly they need to see. When you automate the workforce for the first time, or you do so in a way that gives you this meaningful insight, there can be what we call “Data Paralysis”. This means, that we have so much information into operations that we don’t even know where to start. We want to create meaningful reports that tell us the best story of our workforce.


Here are the most common reports that food service businesses simply cannot live without:

1. FICA Tip Tax Credit Report:

One of the more important ways employers can realize cost savings is through the FICA Tip Tax Credit. The IRS wants to ensure that you are reporting your staff tip earnings, and this report helps to identify how tip wages are getting taxed, but there is more to this. Employers can request a tax credit on tips, and can get up to 7.62% back on all tips throughout the year:

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By reporting on tax tip credits, employers are eligible to save hundreds on each employee through the reporting. If your non-exempt employees are compensated at the minimum wage rate, you can be eligible for this credit. This report helps to keep an accurate track of the tips and wages, and what the FICA tip taxes are, as well as the potential credit. A huge time-saving from having to manually track this data.


2. Tip Reporting:

As part of any operation in the Food Service, Employees are required to report tip income and allocated tips. This is required by the IRS in form 8027 for income reporting. This report breaks out the direct and indirect tips earned by employee and provides a detailed report:

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By providing a report on the detail of a tip report, employers will be in compliance with IRS reporting, and will be able to record the proper tax deductions to tips earned, both indirect and direct. Furthermore, reports such as these take out some of the manual effort to fill out the proper forms – reports like these will even show you what lines to enter within the 8027 form.


3. Tip Signoff Report:

As a complementary report to number 2, the tip signoff report helps employers to create accountability by listing out the tips earned with a signoff. This allows the employee to physically (or digitally) sign off on their tips for that pay period:

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As you look to streamline operations, you want to make sure that you are not only recording pay information related to tips, but you want to mitigate risk of noncompliance with the IRS. This report helps to verify that employees are signing off on their tips earned, and gives you assurance that tips are allocated and reported correctly.


4. Department Summary Analysis:

Part of having a workforce automation system, or even a payroll management system is the ability to have visibility and control over how pay is allocated, how earnings are calculated and any deductions across the entire department. This report provides just that – a summary of the department and the full labor allocation associated with that department:

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In essence, this report tells you where every single penny is being spent, with regards to your payroll expenses. It calculates the earnings, taxes, overtime and any other deductions to show you where your expenses are, what is the responsibility of the employee, and gives you a summary on pay periods, monthly and year to date. This is the comprehensive way to see where the costs are and gives you insights on where to streamline your costs.


Making Decisions with the Data:

There are a multitude of ways to report on your Workforce and drive decisions, and companies will look for many different ways to slice and dice their data. When you first start out building a Payroll Management Solution, the best advice is to start simple; pick a simple set of reports that will tell you a story. Start at the top – such as payroll costs – and then drill down from there. By asking yourself questions about what you see in one report, you will uncover more ways to see the data to help answer those questions.

These four reports represent 80% of what food service businesses need to see on a regular basis when looking at payroll, and by having this level of visibility you can make better, more informed decisions on how to streamline your workforce.