As a business owner, you have the choice to compensate your employees utilizing a number of different methods, as long as you meet federal and state law requirements. One option employers can give their workers is called “piece-rate” pay. Piece-rate compensation allows the employee to earn pay based on the units created rather than the hours they worked.
If you’re thinking about paying your workers using a piece-rate system, here’s some things you should consider:
Running a business takes a lot of time and energy. For small businesses, doing your own billing and payroll might be the way to go, but what about a growing business? When business is booming, you don’t want to spend time keeping your books up to date, processing payroll, entering tax write -offs, or searching for missing tax information. You want to focus on the future of your business, rather than dealing with paperwork. This is why business owners are hiring payroll experts to take care of their financial needs.
Payroll is one of the most important aspects of business– it builds financial stability among employees and boosts team morale. Many businesses, especially small businesses, tend to take payroll into their own hands and avoid outsourcing payroll. Managers and business owners spend hours calculating everything themselves, often times juggling other roles in the business at the same time. Taking care of your own payroll works when your business is just starting out, but this should be avoided when the business grows.
Once business is booming, it’s wise to bring in a payroll expert to make sure that you save yourself time, headaches, and money. This will allow you to focus on the growth of the business rather than worrying about whether or not your employees are going to get paid on time. Additionally, without a payroll expert, there’s a chance that you can make a mistake. Mistakes can lead your business to legal penalties, so getting some help might not be a bad idea.
Freelancers often start out (and end) charging too little for their services. It’s easy to feel like you’re asking too much – especially when your fee is more than you yourself have ever paid for anything – but businesses have bigger budgets than most individuals have so it’s more likely that you under charge your clients than over charge them.
Besides this lack of understanding of business finances, other problems might stand in your way of charging a fair rate:
Online time tracking is a great way to glean information about employee work habits, to learn about the progress of projects, to help make certain types of business decisions, and to easily run payroll and billing. Not tracking time online is almost as crazy as not using a smartphone in today’s world, but let’s not get carried away. Online time tracking isn’t magic fairy dust either.
Billing customers is more complete when businesses track project expenses. This data helps business owners make better business decisions. This is because it helps improve visibility into the real cost of projects, beyond just the cost of payroll.
Businesses can charge clients either by the hours spent on a project or by the total project. A web-based time tracking system is invaluable for billing clients accurately by the hour. A reliable system to track clients and work-history is important when you’re charging by the project. A time tracking system like Timesheets.com keeps track of both clients and projects for freelancers, accountants, and other professionals.
Timesheets.com was designed to track time but it can also record jobs as an instance of work done, ignoring the hours and minutes all together.
For some businesses this is important because not every company, team, or freelancer needs to track the time they spend on projects. Sometimes, just tracking the project itself is all that is needed for billing.
Most employees make an hourly wage and are paid based on the number of hours they work. That’s typical for most businesses. However, some employees are paid based on the job they do regardless of how long it takes them to finish it. Still others are paid based on a daily rate.