Choosing a payroll management provider and strategy for your restaurant can be a daunting task – here’s how to keep the process simple.
First and foremost, the most essential step of payroll provider selection is understanding that one size does not fit all; instead, it’s all about selecting the plan type and breadth most appropriate for your business – small, single-serve restaurants have very different payroll needs than multi-unit restaurants in the midst of heavy expansion.
At Paylocity, our open-architecture system permits restaurateurs to adopt a plug-and-play strategy in which they can incorporate other more niche-specific operators, like Harry and 7Shifts, into their operations without the API-set up headaches that come with using a closed system. You need to find an open-architecture system that allows you to tailor payroll management to the needs of your business.
Providing a thorough and easy-to-read labor distribution report is another hallmark of a good payroll provider. Most payroll providers use simple payroll registers that fail to compartmentalize data by employee class or restaurant location. Our restaurant client base has continually pushed us to simplify those reports.
Restaurants employ all different kinds of people, from $10/hour hostesses to $15/hour servers, and it’s important that a labor distribution report breakdown wage and hours-worked statistics into a detailed report to ensure proper labor force allocation.
In fact, again with the input of the marketplace, we created a payroll data converter, which saves you the restaurateur the headache of having to manually convert data from your point-of-sale provider to align with the specifications required by your payroll provider. Extracting a labor data file from a POS company, and then converting that data to bring it into the payroll provider’s software is tricky and time-consuming; Paylocity’s converter software takes the file – no matter the format – and scrambles the information, allowing for automatic and seamless conversion into Paylocity’s labor data file format.
Building a close relationship with your salesperson is crucial to ensuring proper payroll management – they should know the ins and outs of your account, and are also often well-versed in tax form preparation and your state and local regulations. Fostering these open lines of communication from the outset of the client-provider relationship helps establish expectations for what an operator should rely on a payroll provider to do for them.
The next key that a restaurant needs to look for is the knowledge that a payroll provider can provide service that can shoulder the entire burden of tax form preparation if necessary. You’re not looking to replace you accountant but there’s a lot of peace of mind in knowing that everybody is on the same page and can provide backup when needed.
The next key element is on-going education that your payroll provider can offer you and your restaurant’s management team. We. Have actually taken it to another level by offering an education service called PEAK (Paylocity Education and Knowledge) to help reassure restaurateurs that their payroll operations are being managed appropriately. The service essentially serves as a giant ‘internal Google’ or encyclopedia and can help answer questions about state and local regulations; when opening a location in a new state, for example, PEAK is a valuable resource to ensure compliance with new tax and legal codes.
Another important task reliable payroll providers should be able to perform with ease is the implementation of custom calculations, which are essential to ensuring that your employees are properly compensated in line with their spread of hours and tip credits. In initial conversations with your payroll salesperson, make sure that they understand what those custom calculations look like for your business and state, how they’re set up, and when they’ll be live in the payroll system; your salesperson, after all, is responsible for ensuring that the implementation team does their job, and this is often the place where most payroll companies fail.
Scripting other important employee activities also falls into the realm of custom calculations, from managing the payment of weighted overtime to accounting for breaks and meals during a shift. You want these calculations to be built into your payroll system to eliminate the need to perform unnecessary manual calculations – a proper provider should implement these calculations such that you need only select the employee and enter the appropriate information (hours worked). If your salesperson is ill-informed about the construction and implementation of custom calculations in your payroll system, walk away!
As information becomes increasingly digitized, the importance of cybersecurity has never been greater. A reputable payroll provider should be able to provide you with a security document upon request. After signing a non-disclosure agreement, Paylocity sends its clients a detailed breakdown of their cybersecurity measures. Asking your salesperson to detail their cybersecurity practices should trigger them to put you in touch with a security representative; if this process does not happen, that’s a major problem.
Selecting the right payroll provider does not have to be a giant headache. Following these best practices will ensure that you select a reliable payroll provider that will be able to develop tools tailored specifically to the needs of your restaurant – no matter the size. For more information regarding our suite of services at Paylocity for the New York area, you can call 201-208-0019 or email swilson@paylocity.com.
