Tips for Finding the Best Payroll Software
Congratulations! You’ve gotten to a point that many other small business owners have only hoped for — growth. But now you’re required to find a more robust payroll system.
Sure, when it was you and a couple of co-founders it was pretty easy to sort out payment. But now that you’re growing, it’s necessary to put a process to your operations, offload some of the tedious work you’ve been doing since the beginning, and free up your time and resources to focus on bigger issues at hand.
One smart way to do this is to invest in a payroll software platform that can take care of one of the most important parts of your business for you: paying your employees on time, every time.
Yet, as you know, it’s not nearly as easy as just cutting a check. From properly withholding taxes and reporting to the IRS to tracking PTO hours earned and much in between, there’s a lot to consider when deciding which payroll software system is right for you.
How to choose the best payroll software for your small business
Overall, the best thing that you can do is get a solid understanding of your business’ unique individual needs. As you dive into the capabilities and features of the many payroll systems out there, it can be easy to get swept up in thinking that you need fancy features that will actually go unused or forget an important need you have until it’s too late. So, above all else, know what you need (and what you don’t) and compare everything to that.
How to Find the Best Payroll Service
Payroll covers more than just making sure employees are paid. It also involves keeping compliant with laws and regulations, such as tax rules and the Affordable Care Act requirements. It includes workers’ compensation, benefits and more. Thus, while hiring a payroll service can seem like a big investment, it has the potential to save your small business time, trouble and money in the long run
Basics
It knows the rules. A payroll company should understand not only federal law, but also your state and local regulations, plus any rules specific to your industry
Extras
Workers’ compensation: Many services offer workers’ compensation insurance, which all businesses need by law. Some charge extra for this. Benefits: Many services offer benefits packages, such as employee discount deals and retirement plans. Mobile access: Most payroll services have mobile apps or mobile-friendly user portals so managers and employees can run payroll from a smartphone or tablet
Price
Basic fees range from $20 to $200 a month, depending on features offered, plus $1 to $10 per employee or paid contract worker per pay period. Sometimes payroll services bundle extras that drive up the cost while never being used by the client. Be sure you are not paying for things you don’t want or need.
Some services also charge additional fees, such as for setting up direct deposit or for mailing out paychecks themselves. Others charge for doing your end-of-year taxes. Some have a general annual fee. Be sure you ask about all fees over the course of a year, and what special tasks incur charges.
How to safely choose the absolute best payroll service for you and your employees
Payroll service companies can be a big help when it comes to calculating and filing your company’s payroll taxes, printing checks, and being available to answer important payroll-related questions. Industry-leading companies have streamlined processes and controls that lead to greater efficiency and fewer errors, which can save your company time and money.
When considering payroll service options, it is important to choose a reputable company because ultimately your business is responsible for paying the taxes, not your payroll company. That means you must do your homework to ensure the payroll company is compliant with regulatory standards and that your taxes are paid in full and on time.
Choosing a payroll company
One of the best ways to find potential payroll service providers is to ask other business owners or payroll professionals who they recommend and why. Hearing directly from a company’s customers is a great way to evaluate the company’s processes and service levels.
What services do you offer and what certifications do staff members hold?
It’s important to know what you’re looking for from a payroll company and whether those needs go beyond the basics. The company should have a CPA on staff, and other professional certifications (like Society of Human Resource Management or American Payroll Association) are a good sign of a quality organization.
Is the company bonded and insured?
Find out how much the company is insured for and request a certificate of insurance.
Your Ultimate Guide to Choosing the Best Payroll Provider
Save time
Automated services do so much of the work for you. They keep you up-to-date with continuous processing and insightful reports. Additionally, employee self-service features allow employees to do a lot of the onboarding and upkeep that an employer or payroll manager may have otherwise had to do.
Save money
Most payroll software systems cost less than hiring a full-time bookkeeper.
Reduce errors
Payroll software service reduces the opportunity for people to make manual errors. Payroll can get complicated. Be confident the automated service processes correct information and minimizes risk for things like tax noncompliance.
Access it anywhere.
Cloud-based payroll means you can access payroll information anytime, anywhere—not just at your desk.
Make a Payroll Checklist.
Before you go on your search for the perfect payroll provider, identify what’s on your company’s payroll checklist for software. Map out your organization’s needs first. That way, when you speak with payroll providers you know what questions to ask and which answers to look for. Then bring an open mind for options that you may not have thought of but could benefit your business. Understand your company first before you try to understand a payroll provider.
Choosing a Payroll Service Processor
Make sure it’s easy to process
Identify how you would like to process the payroll – online, via email, fax or phone. Online payroll service companies are the easiest and most popular to use. They automatically calculate regular rates per pay period, overtime rates, tax withholdings, net amounts, employer taxes, and holiday pay. The systems also apply necessary benefit deductions and track PTO/vacation/sick payments. It then makes payments to employees through direct deposit or check.
Multi-State Employer/Multi-State Tax Filing
If your company is a multi-state employer, it is important to make sure that your payroll service files tax reports and processes tax payments for all of the states that hold company employees. Otherwise, you will have to file reports and pay taxes manually, making it possible to make mistakes such as missing a deadline. It also adds internal administrative costs. Keep in mind that the burden of company registrations with new states fall on the employers; however efficient payroll service systems can provide the necessary information for registration as well as the ability to follow up on missing information
Check Online and Mobile Access
Everything is accessible online these days. Most people don’t like receiving paper pay-stubs via snail mail anymore. The accessibility of paystubs and tax forms online at any point of time has become highly convenient. Most payroll services offer employee access to systems for reviewing payment information and downloading tax forms. Some payroll services even offer mobile apps for the convenience of employees as well as employers.
Benefit Bundle features:
Several payroll processors work with benefit companies to incorporate benefits in their services. Usually, a payroll and benefit bundle is good for both the employees and employers due to superior benefit plans for cheaper costs. Do some research on what benefits payroll services offer prior to signing the deal.
System Integration
Payroll services can integrate a variety of payroll related programs, such as accounting software, HR software, and time and attendance systems. It is important to keep in mind that some payroll systems can only integrate with certain programs. If integration is important for your company, research which programs integrate properly prior to choosing payroll services.