For a small business owner or manager, finances are among the most important considerations for the business to flourish. While the majority of financial considerations are strictly internal, payroll is one in which all members of a company hold personal stake. Payroll is also the single biggest expense for most companies, so it’s important to process it accurately and efficiently.
When exploring payroll systems, small business owners and managers must provide full consideration to their needs..
Evaluate Business Needs
No two small businesses are the same. Therefore, each company benefits from different features that cater to the unique nature of the business. Customized small business payroll software has a significant impact on a company, allowing for simplicity and ease of payroll functions.
When evaluating a business for payroll needs, there are some general guidelines and “checkpoints” to take into account. Based off these standard considerations, companies can be sure they have found the best small business payroll software.
When choosing small business payroll software, companies should consider factors such as:
- The size of the company, which translates to required time and resources
- Available budget that can be comfortably allocated to payroll processing
- Level of comfort and familiarity with regulatory and legal payroll considerations
Consider Payroll Software Features
No matter the size of a business, one of the most complex aspects of payroll is accurately documenting and managing taxes. Federal, state, and local tax regulations and guidelines are constantly changing. It is imperative to ensure that small businesses are compliant with these regulations in order to avoid costly penalties and other financial losses.
Small business payroll software offering tax filing features can help relieve owners and managers from the complexities of managing deductions and filing taxes.
Employee Self-Service Portal
An employee self-service portal allows employees to manage their own personal payroll data with a few simple clicks. This streamlines the data keeping process, as it eliminates the need for back-and-forth communication between employees and their employers or HR professionals when managing and reviewing personal information.
A small business payroll software self-service portal should include information such as pay stubs, paid time off balance, and W2 forms. Mobile accessibility of employee portals may also be a consideration.
In today’s business landscape, direct deposit dramatically streamlines the process for all parties involved. In fact, direct deposit is increasingly considered a “norm.”
From the employee’s standpoint, paper checks often serve as an inconvenience. Paper checks require an employee to make a separate trip to the bank outside of work hours and possibly endure a waiting period before the funds become available.
From the employer’s standpoint, paper checks hamper productivity as managers must take time out of their day to physically hand each employee a check.
Eliminating paper checks saves time, effort, and resources for both employers and their employees. Direct deposit is a key feature to look for in small business payroll software.
Small business payroll software with human resources (HR) integration may provide significant benefits. The benefits of HR integration are universal: streamlining communication and organization between departments and ultimately reducing time, resources, and often costs. Less paperwork, automatic updating, and reporting consolidation are key benefits.
Small businesses may wish to consider integration with other systems such as accounting software. Integrating other systems into the payroll process can help reduce or eliminate certain errors that are risked when information is juggled between various departments. Acquiring a system made for integration can also help improve the quality of analytics, as it allows cross-referencing of information from the various solutions for decision making.
Evaluate Cost versus Functionality
When selecting a payroll solution, cost is a big factor for most small businesses. However, choosing the cheapest product available may not be the best option. The cheaper the payroll solution, the more manual work the system requires, in most cases.
Payroll solutions that cost slightly more may save money in the long run. Greater accuracy may save money on payroll, tax, and compliance errors and potentially, on penalties resulting from those errors. Companies may also save labor dollars as aspects of the payroll process are automated. In addition, HR professionals and managers no longer have to manually enter data or export data from one system to another.
Consult with Stakeholders
Before selecting a payroll software solution, business owners or managers should consult with the people that will actually be using the software on a regular basis. This can be done after preliminary research has been conducted and a short list of potential solutions has been compiled.
Stakeholders may have insights that can help with narrowing down the short list. They may also be more excited to use the new solution, knowing they played a pivotal role in the selection process.
Vendor matching professionals may be able to save your company time, finding the best payroll software to meet your business needs. Call or use our vendor matching tool today to see if we can help you.
Authored by: Dave Rietsema