How to process payroll with Enty: Comprehensive guide
So, your business grew to the point where you hired someone and started paying salaries. Everything should be rather straight; your company received service and paid employees in exchange, that’s it, right? Well, no. Managing payroll for your company is a complex process that must be treated with caution; luckily, Enty can help you ease up this process. Let’s go over how you can manage your payroll with us.
What is Payroll?
Payroll is the process of calculation, formalization, and payout of employees' salaries. Starting with tracking working hours and counting net salary, ending with tax reporting.
Achieving a quality payroll is a complex task. Many companies experience difficulty achieving a consistent payroll function (at least at some point in time). According to the American Payroll Association, an error rate in payroll is between 1-8% in companies that manage payroll traditionally. It means that by doing payroll manually, your business is going to lose thousands of euros yearly, even considering a minimal error rate.
Payroll is compiled for everyone who receives payments: both under an employment contract and under a board member agreement. However, if you are running a solo company and receive only dividends, you won’t need to worry about that.
Why Payroll is Important
Mainly, payroll is important due to various rules and regulations. Each company, regardless of location and size, has personnel and, therefore, is obliged to manage payroll by law.
Payroll is the core of the company's HR, accounting processes, and back-office management. In order to stay compliant with regulations and avoid mistakes, a company must pay close attention to payroll.
Now let’s go over the process of managing payroll with Enty.
How to Manage Payroll on Enty
Step 1. Fill out employee/board member information
As the first step, you will need to add your employees to Enty.
If you are just hiring someone new, then you will be able to create an agreement with your new employee right on the platform.
First, you will need to proceed to the “Workers” section and fill out information about your employee.
And after that, you will need to provide information about employment conditions. Make sure to check that you’ve provided the correct information, as it will be used for the agreement with your employee.
Again, if you are just hiring an employee, you can automatically generate a contract based on the information you’ve provided. The contract then must be sent to your counterparty, you can either do it directly from the platform or download it.
The employee will need to sign the contract and send it back to you. In the near future, we will add the possibility of signing contracts directly on Enty.
If you are adding an existing employee, then you will just need to upload the employment contract to Enty.
Step 2. Track employee hours
In order to keep payroll correct, the employer needs to track the hours worked by each employee, including regular and overtime hours, vacation time, sick days, and any other paid time off.
Step 3. Confirm gross pay and payroll details
When the payment period comes, you will need to go to the HR section and check details regarding payouts to your employees.
What is a payment period?
a period, when the employer calculates the employee's gross pay, taxes, and other withholdings, and then issues a payment to the employee. For example, if you hire an employee on April 25th, they will work for a month and expect to receive their pay on May 25th. Their payment period for this salary will open on May 10th, and payroll tax declarations will be submitted by accountants to tax authorities on June 10th.
Enty calculates the payment automatically based on the information you’ve provided while adding an employee during the step 1.
But we know that lots of times, the real number of hours worked doesn’t match the information indicated in the contract, so can identify the real amount of worked hours. You will also need to specify medical leave, vacations, overtime, and bonuses. You can do that easily by pressing the “Edit” button.
You can also delete an employee from this payment period, if needed by pressing the button shown on the image below.
As soon as you check the correctness of the payout information, press the “Send to Accountant” button on the top of the screen. After that, you can chill, the accountant will be taking care of payroll from this moment on.
Step 4. Accountant’s magic
Ok, maybe hard work is a better term than magic, but it’s certainly a miracle when you don’t have to do it all by yourself.
The accountant calculates the taxes and other deductions that need to be withheld from each employee's pay and takes into consideration any additional information about extra pays in order to issue a payslip (a document that shows how much money the employee earned, how much was deducted for taxes and other deductions, and the amount the employee will receive as net pay) with a precise Net pay (amount that an employee actually receives after all the deductions). When it’s done, you will receive a notification in your Enty account and in your email.
Step 5. Pay your employees
Now, as you’ve determined the amount to be paid, you can proceed to the payment. Based on the Payslip and calculated Net Pay transfer the money to bank accounts of your employees and board members.
For your convenience, click the “Copy IBAN” button in the Payroll Details section. We will use the IBAN that you’ve identified during the Step 1.
Here, you can also send your employee/board member the payslip for this payment period via email directly from Enty.
When all the payments were made click the “Confirm Payment” button at the top of the screen.
Step 6. Upload the monthly bank statement
By the 3rd of each month, you will need to upload a bank statement with all the transactions for past month. Bank statement must be uploaded monthly, even if you have yearly accounting plan.
To ease up this process, you can connect your bank account to Enty and we will generate bank statement automatically.
Step 7. Accountant declares taxes
By the 10th of the following month, the accountant declases and pays taxes on the behalf of the employer. This is done based on payroll report and bank statement you’ve provided to us.
Step 8. Maintain payroll records
Enty allows the employer and accountant to maintain accurate payroll records, including employee information, hours worked, pay rates, and all payroll transactions in a form of the Archive in HR service.
These records are highly important for tax purposes, and must be kept for a certain period of time as required by law. If you haven’t completed the payroll for a certain payment period, you can always complete it in the Archive section and we will take care of it after the deadline separately.
That’s it, boss! This is how you can take care of payroll with Enty. We will be improving the process even further in the future to help you focus on your business and not on the paperwork. Take care!
