Payroll processing is one of the most commonly outsourced business functions because it’s both time-consuming and complicated. Paying for traditional payroll services used to be the only option besides handling it yourself manually.
Payroll software is now an option for small businesses to manage their payroll quickly and easily in-house. Whether installed directly on your business’s computers or accessed through the cloud, payroll software can help your small business save time and money.
Benefits of Payroll Software
Payroll software manages and automates many of the processes that you would otherwise spend hours inputting and computing within a manual payroll system. Besides freeing you from the specter of payroll spreadsheets, payroll software comes with a number of additional benefits:
- Employee information: The database stores employment and tax information, emergency contact, availability, schedule, pay rate, and benefits for each employee.
- Time and attendance: When integrated with your payroll software, electronic time and attendance recording can help you get rid of paper timesheets, reduce transcription mistakes and over-reporting of hours, and calculate taxes and benefits correctly.
- Integration: You can automatically transfer your payment records to your other business software, such as your accounting program, resulting in fewer mistakes and transcription errors.
Not interested? Consider outsourcing your payroll to one of our hand-picked payroll service providers.
Potential Pitfalls of Payroll Software
Any software you use within your business comes with a significant investment of time and money. Make sure that you choose the best software for your business type, size, and needs, both now and in the future.
- Before purchasing payroll software, explore its usability and interface through a free trial or demo. You should make sure that the dashboard is easy for you and your employees to understand and navigate. Some software providers offer employee training to help with the software onboarding process.
- If you decide to go with a cloud-based payroll software service, verify that the provider uses a recognized security service, such as VeriSign, to authenticate data transactions and keep confidential employee information secure.
- IRS tax law and employment regulations change every year. If you are found to be in non-compliance with these laws, your business could suffer penalties and fines. Make sure that your software automatically updates this information each year, and perform spot-checks regularly to make sure that the tax tables and data are correct.
Finding the Right Provider
While exploring potential payroll software providers, keep in mind your business’s budget and needs. Although there are numerous tempting extra features offered by many software programs, you won’t be able to use your software effectively if it doesn’t fulfill your basic needs. Look for a provider that offers the functionality you require at a price that you can afford.
- On-premise payroll software, installed on your business’s computers, requires a significant up-front investment. Once you have purchased the program, you can continue using it for years with minimal additional maintenance costs – but choosing the wrong program could wind up costing you hundreds or thousands of dollars.
- Cloud-based payroll software is stored on an external server by your service provider, which means you and your employees can access it from anywhere. This service is usually paid for via a monthly fee within a tiered pricing system, and it’s easy to switch providers if you initially choose the wrong system.
Whether you choose on-premise or cloud-based payroll software for your business, make sure you’re getting a system that meets your business’s needs as well as its budget. Look for providers that offer good customer service and automatic updates to tax tables and other important data.
If you’re interested in payroll software, you may also want to check out time and attendance software.