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 a 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.
Benefits of Payroll Software
Small businesses generally have to function with fewer people performing multiple tasks compared to larger businesses. While it may seem like payroll would be easy to do with few employees, the reality is that payroll can still take hours and errors can cost a small business more than they‘re worth in penalties. Payroll software can help to mitigate these issues and can assist a new company with maintaining a reliable image.
Payroll Software Accuracy Guarantees Ease Worries
Most payroll software comes with accuracy guarantees that provide peace of mind. Payroll software is tested and audited regularly by experts, ensuring the highest degree of accuracy in compensation and tax filing. If there is a problem, the vendor will generally assist with correcting it.
Paycheck Options Fit Needs
Small businesses may operate better with direct deposit or with paper paychecks. Having the option to use direct deposit can prevent bottlenecks at the place of business on payday, but being able to run paper paychecks with just a few clicks can also be convenient. Payroll software vendors often provide options that allow employers or even employees to choose their preference.
Software Simplifies Tax Filing for Small Businesses
Tax filing can be tricky when it’s done manually. Payroll software comes standard with tax tables, automatic calculators, support for deductions, and customization options. These options make it easy to calculate taxes or have them calculated automatically, but they also help small businesses to make sure that key people are familiar with the requirements and guidelines.
Once taxes have been calculated, payroll software can help small businesses with filing and submitting required reports. This degree of assistance can save small business owners time and frustration while ensuring that taxes are filed correctly. Since everything can usually be submitted online, there’s also no messy paperwork to organize and contend with afterward.
Payroll Software Mobile Accessibility Improves Experience
Employees generally expect to have some kind of mobile access to their payroll records. Many small businesses don’t offer this option, however, so having payroll software that allows employees to view their own paychecks and information can improve their experience. This could serve as a competitive advantage when recruiting and keep existing employees more content.
Additionally, the user experience may be improved for the accountant, manager, human resources professional, or owner that’s responsible for doing payroll. Managerial mobile options allow payroll to be run from a mobile device so payroll never has to be done late because a meeting ran over or other outside obligations interfered.
May Be More Affordable
Payroll software may be more affordable than an accountant or third-party payroll company. Payroll software companies may charge a flat rate or per employee. This allows small businesses to select the structure and pricing that fits their needs and budget best.
Some small businesses don’t look into payroll software because they feel it will be too expensive or are unsure whether the time savings will be worth the investment. Payroll software for small businesses may be more affordable than expected, however, and may also exceed expectations for functionality and efficiency. Investigating payroll software is worthwhile for most small businesses.
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 on 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 the required time and resources
- The 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, the 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 shortlist of potential solutions has been compiled.
Stakeholders may have insights that can help with narrowing down the shortlist. They may also be more excited to use the new solution, knowing they played a pivotal role in the selection process.
Save Time and Money
The implementation of HRIS software, which stands for Human Resource Information System, can save a small business a great deal of money and time. For example, an HRIS helps a small business by reducing errors, automating payroll entry and a host of other items. HRIS software allows a small company to manage all of their human resources tasks in one system, allowing a much more efficient and cost-effective HR workflow.
More Convenient Access
Because many HRIS software solutions are web-based, they allow users to access the system anywhere they can access the internet, whenever they have the opportunity. Managing human resources projects will be incredibly easy when you can put in 20 minutes of work on a Sunday afternoon when you have a free moment.
Makes HR Simple
Your HR tasks will all be organized into one simple HRIS software suite, making it incredibly easy to find anything that you are looking for. Cluttered desks will be a thing of the past, making your job and life much easier.
The automation technology included will allow you to enable custom and pre-set automation programs. You will be able to automatically check for compliance issues and policy changes, empowering you with the confidence that business is always being handled.
Analyzes Data and Creates Reports
Perhaps the most valuable aspect of HR software is its ability to provide data-driven reports. Utilizing the data entered into the system, you will be able to quickly generate reports and predictions that will allow you to compare yourself to the competition and find ways where you can focus on reducing costs.
According to research, a typical small business will lose over 5% of their total revenue to employee abuse and fraud. These violations may include wage and hour falsifications or a number of other fraudulent claims. By automating tasks like hourly attendance and payroll processing, you will reduce the opportunity for fraudulent activity and make it easier to pinpoint those who are hurting the business.
Reduces Human Error
Another leading source of unnecessary business costs is human error. By providing an automated system to process HR tasks you will reduce the likelihood of typical mistakes like double entries and give employees the ability to double check their work for any mistakes that may have been typed incorrectly the first time.
HRIS software increases convenience for front-line employees as well, allowing them to access and update their information whenever is most convenient for them. It also gives employees an easy way to access payroll information such as tax information, previous checks or direct deposits.