The Ultimate Guide to Choosing Payroll Software for Your Business
Even if your business one employee, payroll is of utmost importance to you. As a business, you will have to streamline the right processes to ensure the staff’s paychecks are issued on time while comprehending various other factors. Before choosing the perfect payroll software for your business, you are recommended to undertake in-depth research and analyze the features that your business has to have in any payroll software you install. Any software that you use has to have the capacity to boost growth and not otherwise.
Overview of Payroll Software
Some businesses look at payroll software as a check vending software that helps in issuing paychecks on time. However, there is more to payroll software. Handling payroll processes is a complex task that has to take care of taxes be it federal, state or local level taxes; benefits deductions; wage garnishment, bonuses, pay raises, penalty, etc. Additionally, if the business is associated with contractors, freelancers, and outsourcing agencies, the factors to be considered will differ. Some companies prefer biweekly payments, some prefer monthly; in the case of contracts, per task payment is done. These payments can either be done via checks or can be credited in employees’ accounts.
Types of Payroll Software
The type of payroll software that can suit your business will depend upon the size of the company. There is no one-solution-fits-all software. Some payroll software vendors build solutions to help small-size businesses or large scale businesses only. They build solutions with specific conditions. Let us explore all the types of payroll software available in the market.
Built specifically for small scale businesses (less than 50 employees)
Suitable for medium-sized businesses (employees strength is 50 to 100 employees)
Made specifically for large companies (where over 100 employees are working). If your company comes under a large scale business and operates from multiple locations, this solution is perfect.
Payroll Software Benefits
Every software that a business plans to deploy in the work process has to be user friendly, easy to install, easy to integrate, reliable, and cost-effective. Reliable payroll software offers a range of tools that are well-designed to handle payroll activities effectively and efficiently. This software helps to replace manual efforts with a digitized or automated system. Apart from the above-mentioned benefits, perfect payroll software can deliver the following benefits to your business:
Save your time and resources
Using the right payroll software, you will not only be able to reduce manual tracking and payment but it will also be able to establish an efficient working pattern among the teams. You can save time by processing payroll faster by using the software and all the data available in the software in a few clicks. The time and resources saved here can be utilized in other areas for better efficiency and productivity.
Flexibility in Payment Methods:
Most of the payroll software in the market will give you a variety of options and flexibility when it comes to issuing paychecks to the employees or releasing payouts to the contractors/freelancers, etc. The salary/payment receiver can choose the mode of payment as per their preferences and you can mention in the system to facilitate timely payments to the receivers (through their preferred mode).
Automatic Payment Disbursement
The payroll system not only helps in making payment through various modes but it can also automate the process of payment disbursement. While some of your employees might be working on a monthly salary, freelancers or contractors might demand payments after completion of every project. Some service providers work on an hourly basis and hence need to be paid accordingly. If all of this has to be done manually then the process stands a risk of human errors. Payroll software automates every payment depending upon the receiver’s preferences and work agreement.
Tax calculations
Payroll software is built in a way that it automatically applies tax deduction and releases payments easily.
Reduce Errors
As human efforts are either reduced or eliminated the work process stands a lesser risk of human errors and limits your liabilities/losses.
Reporting
Creating reports such as cost summary and tax remittances based on the data available in the system becomes easier with payroll software.
Current Trends in the Payroll Software Industry
Like any other software or IT product in the market, payroll software keeps adapting to new market needs. With every new trend or scope of improvement, it makes changes in it’s each version. So, while you will be trying to keep up with the business trends, this software will be going through the same process and will adapt to the trend so that your business stays competitive. Here are a few of the trends in the market that you should consider while deploying any payroll software.
Cloud-Based Payroll Software:
Cloud-based payroll solutions are one of the trending solutions that offer flexibility and mobility just as the market needs. Many businesses are moving to SAAS model payroll solutions as it provides convenience, and it’s tools are accessible through mobile. This means, if you are a small business, this solution might suit you the best. This solution is budget-friendly.
Employee-Focused Solutions:
Payroll software with employee focus tools and features are trending in the market. These tools can be used to manage time and benefits with the company with employee self-service dashboards and more features.
Customization:
Rather than choosing the whole software, businesses can choose the tools and features of their choice and deploy only what they need at that moment. This gives more flexibility to the businesses and the integration of payroll software with other software becomes easy.
Choosing the right Payroll Software
Before you start looking for the best payroll Software Solution for your business, take some time out, and go through the business review of the payroll software you have shortlisted. To narrow down the search process and make it more effective, you can bring together all the employees and members of the business who are responsible for the business decisions and those who are going to use the software. This will help in getting in-depth insights into what the business needs from the software to drive the growth, what are the business objectives, are there gaps in the process, and more. All this has to be discussed and understood to choose the perfect payroll software.
Here are a few questions that you can ask to drive your business review process.
- Does your business suffer from inconsistencies, payroll gaps, and related issues? If yes, what impact they make on your business?
- Are you using any payroll software? Is it updated and helping your employees as expected? Or the payroll system you are using is not meeting your requirements?
- Is your payroll software cost-effective? Is the cost of using the software more than the benefit you earn?
- Which tools and features are must-have for the company, and which are not so important?
- How many of your employees are skilled to use this software? How many need to be trained?
- Which method of deployment makes more sense to the business and is more cost-effective for you?
- How many people will be having access to the software?
Different Types of Payroll Software Implementation Methods
The market is filled with different types of payroll software which are designed with different technologies and have different deployment methods to suit the size of the business, budget, and needs of the company. While cloud-based solutions are trending and popular among small and medium-sized businesses, large businesses typically prefer on-site payroll software to offer more customized and proprietor services.
Cloud-based
Cloud-based technologies are becoming popular in all the sectors and payroll software is not an exception to it. These Technologies operate through third-party servers that are hosted on the internet and offer business mobility and easy accessibility which every growing business needs. These solutions are cost-effective and hence are preferred by many small and medium scale businesses.
On-Site
These solutions are built on the office premises or buildings. They require hardware, maintenance, and ongoing updates which increases the cost of deployment. Large companies usually go for this solution.
Decide on your budget
Once you undertake a complete review and analysis of your business needs and you are clear about what you are expecting from payroll software. it is important to fix a budget that you can allot to purchasing and updating the payroll software. As discussed above, you can choose a whole suite of solutions or specific tools or features as per your needs. Accordingly, you will be able to choose a vendor too.
One of the crucial initial steps to take while deciding the perfect payroll software for your business is to consider the people who are going to use this software the most. Having clarity about this will help in making informed decisions that will be sustainable for a longer duration. See if the people are skilled or require training. Try to balance the cost of training with the profit you can earn from installing the software and go ahead accordingly.
You can think of these questions while making decisions about the software in terms of people.
- How many people will be using the system?
- What is their skill level?
- What is the purpose of use for each user?
- What type of help people using the software would need?
Must-have payroll software features
Payroll software solutions offer features and tools that help in boosting a company’s communication system. Choosing the right features will help in boosting work efficiency, error-free workflow, and more.
- Make sure your software offers you at least these core features:
- Mobile Access
- Employee Self-service portals
- Safe access and secure data storage.
- Payroll processing
- Tax and benefits calculations
- Tax filing
- Payment Processing
- Third-Party Software integration
- Compliance system
- Reporting
- Calendar integration.
Compare the shortlisted payroll software solutions.
You are recommended to shortlist a few vendors only after considering all the above-mentioned steps and criteria. Once this is done, you need to compare the shortlisted vendors and select the best two for your business. Make sure the vendor and software you choose can offer you the best ROI in the market.
The market is flooded with a variety of payroll software to meet every possible market demand. No matter which business you have and what is the size of your company, you are most likely to find a perfect payroll software for your business if you are ready to do a little bit of research.
However, apart from the things we have already mentioned, you, as a business, have to connect to vendors directly, communicate, and understand what they can offer you. Every software is the same in one or another way. What makes these software different is the one who is offering them. The support mechanism, reliability, experience, and market value of the vendor play an important role. In the end, you are buying a payroll software to simplify and automate the work process and not to complicate it.
A Good Payroll Software Vendor Offers the Following
- Market prominence and goodwill
- Positive reviews on the internet and testimonials of the actual users.
- 24*7 active support team.
- After-sale services
- Installation guide or team which can visit the premises and deploys the solution.
Arrange Demos with Payroll Software Vendors
It is important to try your hands on the software (more as a practice session) before going ahead and deploying the system. Once you have selected the best two vendors for your company, get in touch with every selected vendor, and ask for a demo. Most of the vendors agree to this. They would send the team which will help in understanding the product better and demonstrates the features and tools for you. Make sure the people who are ultimately going to use the software are present during the demo. You can ask for their feedback after the demo.
You can proactively share a list of the vendors mentioning what you are looking for. This will help them to present a demonstration accordingly. They will cover all the tools and benefits of the software which will meet your expectations.
Payroll software is a must-have if you have a team working with you. Business efficiency can be boosted effectively with technologies and every technology that can keep your employees happy is never a waste of investment.
