Tech

The Definitive Guide to Payroll Software for Small Businesses

3 Mins read

Payroll software can make life easier for small business owners and HR managers alike, as it allows the scheduling of payroll tasks to be automated and handled with minimal need of oversight. It can also make tax preparation simpler and faster by calculating relevant amounts such as income taxes and social security taxes automatically, making it easier for small businesses to maintain compliance with federal and state regulations and avoid costly mistakes that might otherwise lead to penalties and fines. If you’re thinking about implementing payroll software in your small business, we’ve compiled all the information you need to know into this comprehensive guide.

Choosing Payroll software

Deciding which payroll software is right for your business can be challenging. It’s important that you spend some time learning about all of your options before making a decision, so you can choose a solution that fits both your budget and specific needs. This guide should help get you started, but there are other things to consider, including whether or not you want software integrated with other platforms—as well as how many employees you have. Before choosing payroll software, it’s important to understand all of your options so that you can make an informed decision about which one best suits your business. 

Here are some questions to consider when selecting payroll software: 

Does your company need on-site or cloud-based support? 

Is having employee data always available via mobile devices important? 

Do multiple staff members share responsibility for managing paychecks? 

Do you want payroll software that integrates with accounting solutions? 

How much do you currently spend on processing checks, printing reports, and filing taxes? 

The more detailed your list of requirements is, the better able you will be to determine what type of platform will work best. Asking yourself these types of questions will also help ensure your return on investment (ROI) after implementation. You may find it easier to come up with answers if you create a comprehensive spreadsheet detailing existing processes in the order to review them later.

Preparing your business

payroll software is often more affordable than you think, but it’s critical that you get your business prepared for its implementation. You will need an accurate set of hours worked by all employees, which means collecting timesheets from every employee. This can take a few days depending on how large your staff is, but if you do it correctly, it should only take 30 minutes per person. Even better, ask all employees to submit their timesheets using an online form so they don’t have to bother emailing or faxing them in. If some are traveling on business during payroll time, allow extra time so they can still submit their hours on time.

Benefits of using payroll software

Using payroll software allows businesses of all sizes, but especially small ones, to achieve greater efficiency and ensure compliance with employment laws. By automating timekeeping and paycheck calculations, employers can free up valuable time so they can focus on other aspects of their business. Not only does an automated payroll solution save you time and money by reducing (or eliminating) paperwork, it also ensures that all employees are paid accurately—an assurance that is vital when disputes arise. It’s much less expensive to run payroll electronically than it is by hand; in fact, switching to electronic processing may reduce your costs by as much as 50 percent! As well as lowering your expenses (and increasing your profits), using payroll software reduces employee turnover rates—which saves even more money.

Setting up payroll software

The first step is choosing a payroll provider and shopping around until you find one that meets your needs and fits into your budget. Most providers offer free trials and it’s a good idea to try out more than one software solution before settling on one. Once you’ve found a company you like, it’s time to get acquainted with its features. From there, set up an initial payroll so you can get familiar with how it works, and don’t forget to test out all of its features. When you feel comfortable with how everything operates, implement payroll in your business so it can start running smoothly from day one.

Like most small businesses, you’re probably juggling many different roles. You want your company to succeed, but it can be difficult to dedicate time to researching new software. Finding good payroll software is especially tricky—there are so many options available that it’s hard to know which one will work best for your business. With some research and critical thinking, you can find software that fits your needs and helps your business thrive.

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