When you run any type of business, paying your employees on time and with the agreed amount of compensation is one of the most crucial day-to-day operations. Payroll takes time to ensure accuracy and timely delivery of paychecks, either by paper check or by direct deposit into individual employees' bank accounts. Luckily, payroll management software is available to help you process compensation to be issued quickly and accurately. The large number of payroll software packages out there can make it seem challenging to determine which software package would be the best one for your company. If you run a small business with only a few employees, you'll need a different payroll program than a larger company would need to manage all the necessary data. The most appropriate program also depends on the classification of your employees, your selected payroll schedule and your business's tax filing needs.
Payroll Management Software Features and Benefits
Accuracy is a major benefit of payroll software; it leaves the days of paper ledgers behind and saves you the time needed to calculate each employee's compensation manually. Accurately entered data on hours worked and wages is also much less prone to error than these types of calculations by hand. Payroll management software also keeps track of all necessary employee data in one place, including contact information, job role, rate of pay, employee classification and individual tax information. Modern payroll software packages come with direct deposit options, which cut out the time-consuming step of employees needing to deposit a paper check in their bank accounts. These software tools store each employee's bank account information with secure encryption that protects it against outside compromise.
The right payroll management software also makes tax filing much less of a headache for both you as a business owner and for your employees. At tax time, payroll management software can generate the needed tax summaries each employee will need to file his or her individual income taxes; these reports include total earnings and withheld taxes, along with any other needed information based on employee classification.
How to Pick the Right Payroll Management Software
Simpler software programs for payroll will suffice for smaller businesses, and these are often linked to accounting and bookkeeping software. More complex staff hierarchies with multiple departments require more full-featured payroll software as well as knowledgeable payroll staff to manage it. Some other factors in picking the right software include the upfront cost, the associated staffing needs, the needed tax filing procedures and the level of security features that come with each software package. Weighing each of these against your business needs will help you make the most informed decisions about selecting payroll management software.
If your employees are classified as independent contractors, salaried workers or other types of employees, you'll need payroll management software management tools that can issue compensation to them based on the terms of each employment type. Every business with specific types of employees also needs software with the needed tax-filing tools. As your business expands and you add more workers, your payroll management software should easily be able to accommodate the additional data. High caliber payroll management software also comes with reporting tools that allow you to track labor expenses and the ability to create "what-if" scenarios from these reports. This feature of a payroll management program is especially helpful when you're considering the potential cost of hiring more employees in the future. For more information on comparing individual software packages, vendor-released program specs are good places to start for the basic program details.