If you're a business owner, you don't need to be told how complicated paying employees can be. Managing employee hours, following ever-changing tax laws, and accounting for changes in pay rate can be time-consuming.
Having a solid payroll system can save your business time and money, but finding a system that can fit your company's needs can be tough.
If you're in need of a new way to handle payroll, you've come to the right place. We'll tell you what you need to know to pick the best payroll system for your company.
Finding The Right Payroll System For Your Company
If you're not a payroll or finance expert, picking a new payroll system can feel like a daunting task.
Whether you're looking for payroll software you can handle on your own or hand off to your finance department, we'll help you find a system that fits your needs. Follow these tips when you're shopping around.
Cover The Basics
The simplest way to choose an effective payroll system is to think about what you need it to do.
Payroll systems do more than just ensure that employees are paid on time. A lot of different things have to come together to manage payroll for a company.
When you're choosing your new payroll system, be sure to take these factors into consideration:
Employee Time Management
Consider choosing a system that can double as a way to track employee hours.
Your employees easily enter their hours for the week, and you can run payroll based on their time tracking.
Managers can save time by letting their employees enter their own hours, all they'll need to do is verify their hours are correct and run the payroll.
An employee time management feature can be helpful even if your employees are salaried. You can track time on tasks and projects to make sure that people are working efficiently.
How often do you pay your employees? Bi-weekly pay tends to be the most popular pay period for businesses, but it isn't the only way.
Your new payroll system could help you change your pay periods to a schedule that works better financially for your business.
You could go from bi-weekly pay to weekly pay periods, monthly pay periods, or even pay periods that happen multiple times a week.
Have you given thought to the way you pay your employees? You may want to consider giving your employees more payment options to make payday more convenient.
Some businesses prefer to pay their employees with paper checks. Others use direct deposit, put their funds on special cards, utilize ACH transfers and payments, or use popular pay platforms like PayPal or Venmo.
Think about different ways you can pay your employees when you're looking into new payroll systems. You may find a more efficient or less expensive way to pay your employees.
Do your employees earn bonuses or commissions? Do you have a restaurant or business where employees can earn tips?
Adding in extra funds, handling taxes, and keeping the books balanced can be difficult on your own. Many payroll programs can handle recording and remitting taxes on supplemental wages.
Think About Different Roles
How involved do you want your business to be involved in payroll?
Some businesses are far too busy to handle payroll in-house, others want to be somewhat involved in tracking hours or managing payments, and some may choose to handle every aspect of payroll management.
You may want to consider completely outsourcing your payroll needs. Instead of choosing payroll software to use in-house, it may be easier for you to hire a bookkeeper or CPA to manage all aspects of payroll.
You could choose to have managers somewhat involved in payroll by managing employee hours. You may want to assign all payroll duties to one manager.
Think about who will be using your payroll system the most. Talk to them about what they think their needs are, and work to find a system that can meet them.
Consider Ease Of Use
Some payroll programs can be very simple to learn, and others may involve more finance and technology skills to properly use.
Think about how simple payroll software is to use, and how long it'll take for your team to learn.
Some businesses can afford to devote a few hours to software training, but others may be strapped for time.
You don't want to buy a program that your staff spends a lot of time learning and slows down the payroll process, or causes you to spend money on resources to learn how to use it.
If possible, try out the payroll system before you buy it. Request a demo and ask key users to test it out.
Keep Security In Mind
Security should be top of mind for anyone researching new payroll systems.
Social security numbers, banking information, and other confidential and important information will be needed to properly process payroll. If that information gets into the wrong hands, someone could easily commit fraud.
You'll want to make sure that sensitive information is properly stored and that the right people have access to it.
Look for programs that make it easy to grant and revoke access to certain information. Software that gives people access to information based on user levels can help make security simple.
Sometimes payroll software can cost more than the initial purchase price. It isn't uncommon for certain features to cost more money.
You may need a payroll system that's able to file and remit federal, state, and local payroll taxes. Some programs may only offer one kind of tax level and you may need to pay more to access the others.
It's possible that cost may increase if you hire more employees. You may find that you need to purchase software upgrades instead of being able to download them for free.
Make sure to read the fine print before you use any payroll service or purchase. Neglecting to do so could end up costing you money.
Now that you know what you need to do to choose a new payroll system, you may be interested in other ways to make your business more efficient.
If you struggle with managing your busy day, check out our post on how to properly multitask. Learn the right way to tackle difficult work and clear your to-do list.
Remember, our blog is full of helpful information for all professionals. Browse our content and learn how to take your business or career to the next level.