Payroll is the process of paying employees in the company compensation for their work while factoring in taxes and benefits. The process is repetitive and time-consuming, but it is absolutely necessary to ensure that everyone in your company is paid the right amount on time.
In this article, we go through the basics of payroll procedures and how to choose the right payroll management software for your operation.
What is Payroll?
Payroll is the procedure of compensating employees for their contributions to a company’s success and is usually taken care of by either the accounting or human resources departments. It covers all aspects of employee pay, including the preparation of checks or bank transfers and maintaining records of each employee’s salary throughout the year.
While it may appear that making payments from the company to an employee is simple, there are several crucial factors to consider. Maintaining a uniform payroll process for each employee can help you avoid mistakes and stay compliant with applicable tax rules. For most businesses, the payroll process can be divided into five basic steps:
- Choose a payroll system.
- Formulate a payroll policy.
- Collect information from employees and set up an automatic deposit.
- Approve and submit the payroll.
- Make payroll records and archive them.
Payroll processing involves more steps than meets the eye. Once you’ve done the initial payroll system setup, however, the workflow becomes a lot more manageable.
How Does Payroll Software Work?
You can run payroll swiftly and efficiently with the help of payroll software, allowing you more time and energy to focus on your business.
Payroll software takes care of everything about paying wages and filing payroll taxes. In addition, they’re used to keep track of hours worked, calculate earnings, print and deliver checks, and more.
Many businesses set up a payroll system using Excel, but there’s a growing trend of using payroll software to automate the process.
Benefits of Using Payroll Software
Payroll software demands minimal input from employers. For example, changes to tax laws are automatically updated with the software, meaning businesses can worry less about staying compliant. This has numerous rippling benefits for employers.
Time Saving
Payroll isn’t exactly a fun task; though it’s a necessary one, the roles responsible for payroll are unlikely to enjoy the repetitive tasks. One of the benefits of payroll software is its ability to make the job easier for employers and help them save time that could be better invested in other aspects of the organization.
Minimise Mistakes
Payroll software has the advantage of considerably reducing the possibility of human error through its database and automated scheduling to ensure that your employees receive the exact compensation they deserve on time.
What Factors Should I Consider When Choosing Payroll Software?
When choosing the right payroll software for your company, there are many factors to consider, including functionality, ease of use, support, integrations, etc. Here are the top key factors you should look for when choosing payroll software:
1. User-friendly User Interface
An excellent software is useless if the user cannot figure out their way around it without constantly needing assistance. Features like quick access to commonly used features, the ability to easily schedule payments etc are where payroll software can really save time.
2. Accounting Software Integration Capabilities
While payroll management is sometimes a function of other systems such as HR management software, enterprise resource planning (ERP) software, or accounting software, these functions are often limited and only meant to manage a few employees. As your business expands, the number of employees will steadily increase; meaning that you’ll need to handle more complicated payrolls, which will necessitate adding functionalities like hiring, reporting capabilities, accounting books, and timesheets that come with dedicated payroll software. It is critical that the software you select here can integrate with your other systems to simplify the process and save time.
3. Software Type
Cloud software offers remote access, has lower entry costs and lower maintenance costs at the risk of storing your data in a remote server,, or stand-alone software that offers greater control but may demand higher maintenance costs
4. Technical Support
Good technical support is underrated and is only valued when you need it most. Technical support that can promptly understand your quandaries and provide real solutions can save a lot of time and headache. Access to a good knowledge base is also immensely helpful for those times you need to make a quick reference.
5. Automation Features
Your software should be able to handle your payroll process automatically if it doesn’t need frequent setting changes. You can configure it to run whether you’re at work or on leave with auto-approve features.
6. Employee Self-Service
A self-service portal gives your employees convenient access to their payroll information. Businesses can save time and money by allowing employees to input and update their personal information, benefit elections, etc.
A summary of key factors to consider when browsing payroll software.
What About Outsourcing to a Payroll Service?
Outsourcing payroll lets you delegate data entry, calculations, payroll processing, and other administrative tasks while absolving you of managing the software.
Many new and fast-growing businesses usually end up outsourcing tasks like payroll management and accounting as doing so saves time and reduces costs associated with hiring an in-house accountant or human resources executive.
Yau and Wong provides payroll services to save you time and costs while also taking care of all your transaction records, invoices, receipts, government forms handling, providing monthly financial reports and CFO reviews.
