Action Steps to Implement Payroll Software
The best contacts and resources to help you get it done

Choose free payroll software for small businesses

If you are just starting your business or you just have no room to spend money on payroll software, consider choosing one of the many free payroll software programs. Some free payroll software programs will not contain extra features, such as automatic updates or storing tax information. That will have to be handled manually in most cases.

I recommend: Automated Payroll Essentials is a free payroll software solution that manages weekly payroll and tax information for all employees. Paymastr Payroll is another free program that can take of your taxes, employee payroll and overtime, and provide you with summaries of your information.

Purchase web-based payroll programs for your business

Web-based programs provide you with convenient access from the office, home, or any other place that has Internet. And, web-based payroll solutions allow you to subscribe to a service you pay for on a monthly basis; in most cases you can cancel it at any time. The monthly fees for web-based quick payroll software run anywhere from $40 to $80 per month.

I recommend: PayCycle offers a totally web-based payroll system that you can access from anywhere, and it also comes with many features. SurePayroll is another online system that allows you to manage your payroll and tax issues.

Find payroll systems that are scaled to your business's payroll

It doesn't matter if you have a great program to work with; if the program can handle more than 500 employees and you only have 10, the program will not be cost-effective for your business. Many programs are priced according to the amount of employees they can handle. For fewer than 50 employees, the price ranges from $80 to under $200. For large businesses with more than 500 employees, you will be up towards $1500 or more.

I recommend: PenSoft Payroll Solutions provides many different versions of its payroll software for businesses as small as 50 people and as large as 500 or more. Center Point Payroll from Red Wing Software is tailored to mid-sized companies looking for comprehensive payroll solutions.

Helpful advice for making the most of this Guide

• •  If the pricing and costs of payroll software is particularly important for the bottom line of your business, take your time with free trials and demos to find the most usable program for your company's budget.

Guide to Do-It-Yourself Payroll Software

Make payroll easier with an accounting suite, payroll software or an online service

By John Henshell, Writer/Editor/Communications Consultant, John Henshell

1. Ease of use for someone without bookkeeping experience
2. Calculate employee earnings and deductions
3. Deduct federal, state, and local payroll taxes in accordance with the laws
4. Print payroll checks
5. Prepare and print related tax forms, such as W-2s
6. Generate reports and keep IRS-required records
7. Enable electronic direct deposits to employee bank accounts (optional)

Action Steps
The best contacts and resources to help you get it done

Consider an accounting suite with a payroll solution

Many popular accounting programs include basic payroll software; others require you to purchase an add-in module.

I recommend: Three of the most popular accounting suites — QuickBooks, MYOB and Peachtree — include payroll solutions. See how their payroll capabilities rate in TopTenREVIEWS' Accounting Software Reviews.

Compare stand-alone payroll software programs

A separate payroll software program may suit your needs better than a component of an accounting suite. In general, stand-alone programs are cheaper than full accounting suites and may offer more of the features you want. In many cases, files from these payroll software programs can often be imported into popular accounting programs.

I recommend: Popular stand-alone payroll software includes ZPay and PenSoft.

Sync up with your accountant

It may be wise to choose the same software used by your accountant. This enables your accountant to import your payroll software files in a snap, which can save time auditing your books and preparing your taxes. And that saves you money.

I recommend: If you need an accountant, find one through your contacts or start with the local chapter of The American Institute of Certified Public Accountants.

Get help with payroll software

Sometimes, even the simplest small business payroll software program can leave you scratching your head. If you run into problems or questions, check the manufacturer's Web site for FAQs and customer support.

I recommend: If you can't find an answer to your payroll software query, seek help from your peers. QuickBooks offers a community discussion forum where you can ask your payroll questions.

Helpful advice for making the most of this Guide

• •  Expect to pay an annual fee to update the tax tables in your payroll software.
• •  Some payroll solutions may require you to purchase checks from the software manufacturer.
• •  Look for payroll software that is targeted to a business your size, and will work if your payroll grows.

Action Steps
The best contacts and resources to help you get it done

Read software reviews on payroll programs

Your best bet for finding the right small business payroll software is to take a little time and research all your options. The most helpful research tool when it comes to buying software are the websites that offer comprehensive reviews of payroll software programs.

I recommend: Entrepreneur is a great source for payroll software reviews, such as this one about Sage Abra software. ZDNet also provides professional and use reviews of the top payroll software titles.

Find Internet and trade publications to get information on payroll software

You can find many resources online where experts provide in-depth analysis on all types of payroll software and services. Some even offer articles that help you decide which free payroll software solutions would best fit your company.

I recommend: WebCPA offers many articles that review and compare payroll software for the small business, as well as for larger corporations. Small and mid-sized businesses can benefit from reading the buyer's guide to payroll software and services from HR World.

Pick easy payroll software solutions by discussing them with other business owners online

Online resources can be your best source for finding payroll solutions. There are many forums and message boards where you can connect with other business owners to share ideas and discuss different payroll options. Getting information from a person who has used the software is usually very informative.

I recommend: You can find a lot of useful information about payroll software from PerfectSoftware by checking out its blog. The TMI Message Board is a place where you can discuss your options and get advice from others who use payroll software for their businesses.

Helpful advice for making the most of this Guide

• •  Your business contacts can also come in handy when it comes to choosing the right payroll systems for your business. Your associates may use a certain type of software that would work well for your business.

Guide to Payroll Software Key Terms

Learn significant payroll software key terms in order to fully utilize the service

By Kim Hill, Owner, Karsun Designs

Action Steps
The best contacts and resources to help you get it done

Web-based payroll

Web-based payroll is online, so you don't have to download software that can become corrupted or lost in the case of a computer repair issue.

I recommend: Bigbyte explains the advantages of using web-based payroll software.

Automatic updates

Payroll software with automatic updates eliminates having to manually update every time there's a change in tax laws, calendar days (such as leap year) and more. This is very convenient because you're assured your software is up-to-date every time you use it.

I recommend: MM Technologies has information on tax law automatic updates, found in the payroll software section.

Free payroll software

Free payroll software can be permanently free or free for a trial period, which usually lasts about 30 days and gives you an opportunity to use it before you become committed to purchase it.

I recommend: Pensoft offers software with a 30-day free trial to try it before you buy it.

Tax information

Payroll software should include tax information so that you do not have to do that separately. Tax information is important because this will figure in to your payroll figures and accounting.

I recommend: The Payroll Taxes site offers extensive information on payroll taxes and payroll software.

Automated payroll system

An automated payroll system does certain tasks for you automatically once you perform the initial setup. This can include automatic deductions, direct deposit functions and more.

I recommend: Microsoft Dynamics has a wealth of information on the automated payroll system.

Human Resource Management System

A Human Resource Management System can help you maintain certain functions, such as organization charts and spreadsheets.

I recommend: Sage Abra presents information on a Human Resource Management System that can help you with your payroll software functions.