How do you delegate payroll when you’re the only one who’s ever done it? Suzanna Cameron is the owner of Stems Brooklyn, a New York-based flower shop and event planning company. She recently asked that exact question on Gusto’s Facebook group for small business owners:
Cameron’s not the only small business owner who might feel strange about having their team know what they make. And what if employees’ salary information gets in the wrong hands, too?
If you want to delegate payroll, you can. Here’s how to deal with payroll privacy when your team is seriously small.
Step 1: Decide who should run payroll.
Generally, small businesses run payroll in the following ways:
- Totally outsourced: This is when you work with a bookkeeper or accountant to deal with everything involved with running payroll.
- Half outsourced: This is when you do a few of the payroll tasks, like logging into payroll software or tracking hours, but an outside accountant takes it across the finish line.
- Totally in-house: This is when you run payroll without any help from a bookkeeper or accountant (unless it comes to tax issues), either by using payroll software or manually calculating it with a good old-fashioned spreadsheet.
Regardless of how payroll is run, many small businesses designate an HR, operations, or administrative professional to be the main point person.
That person will be a successful payroll manager if they:
- Have good judgment and discretion. You don’t want someone blabbing about salaries and leaving their payroll windows open.
- Know how to resolve sensitive issues. If an employee doesn’t get their paycheck on time, and you’re not around, how will they handle it?
- Work well under deadlines. Even though payroll software can automate this part, it’s important your admin makes sure the team actually gets paid on payday.
- Know all the payroll terms. Think FICA, FUTA, SUI, and anything else that appears on a pay stub. Employees will have questions, and you want your payroll admin to have the answers.
If no one internal comes to mind, you might have to hire someone new. For most small businesses, the best solution is to hire an outside CPA or bookkeeper.
Step 2: Find someone you’re comfortable with.
It’s not easy to stay calm once you’ve asked someone else to sift through your financial information.
While you can use a payroll service that gives limited access to users, it’s still important to minimize the risk of information leaking.
Here are a few interview questions that will help you suss out the right employee, candidate, or vendor for the job:
4 interview questions to help you find a good payroll manager
– Tell me about a time when you felt overwhelmed at work. How did you get through it?
– How do you prioritize your workload when everything on your plate is “top priority?”
– What would you do if someone tried to get you to reveal something confidential?
– Tell me about a time you made a mistake. How did you resolve it?
Step 3: Set boundaries.
Yes, some payroll software can restrict access to confidential data based on roles. But the person running payroll will still see your pay and how much the entire company earns. However, you can control who else sees that sensitive info by having your payroll admin follow these must-dos:
- Use a secure payroll provider. Ideally, you want a service that has multi-factor authentication.
- Never leave a laptop or phone open with sensitive payroll information. Always close tabs after running payroll, use hot corners if you have a Mac, or even a physical computer privacy screen.
- Be smart about passwords. Update your payroll software passwords quarterly or every six months, and if anyone with access ever leaves the company. Consider using a password manager like 1Password or LastPass so you don’t have to constantly click “Forget Password.” Each service will only set you back a few bucks a month.
- Store your paper files securely. Ideally, most of your payroll information is stored in the cloud. But if you have paper copies of anything, make sure you lock them up in a secure spot.
And if payroll isn’t run or private details are leaked, confront it immediately.
“You either trust that the payroll manager you’ve hired can manage confidential information, train and instruct them on the importance of this skill, or let them go if they can’t (or won’t) keep their lips buttoned,” advises Robin Schooling, a former payroll manager who is currently a VP of human resources in Baton Rouge, Louisiana.
Running payroll is easy. The hard work comes in identifying members of your team or outside pros who can be trusted with such a meaningful task.
So be thoughtful about who you bring on and deal with sticky situations right when they happen. Only then will you be able to focus more on your business growth—and less on the drama.
The opinions expressed in this article are those of the author and do not necessarily represent Gusto’s views.
