The Top 7 Benefits Of Payroll Software
Discover the best reasons why you should be using payroll software for your small business.
When deciding whether payroll software is the best choice for your business, you need to consider the benefits of payroll software against its cons.
While all payroll software is designed to make paying your employees easier, the best payroll software will have benefits that extend into employee management processes, benefits administration, and other HR tasks.
This guide breaks down the benefits of payroll software for small businesses.
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The Top 7 Benefits Of Payroll Software
The benefits of payroll software include faster payroll runs, better payroll reporting and analytics, payroll data accessibly, and more.
Here’s a look at the top seven benefits of payroll software.
1. Save Time Running Payroll
Payroll software substantially reduces manual data entry through automation and integration with third-party software service providers, such as employee time tracking or accounting software.
Additionally, payroll software can automatically fill out tax forms, generate extensive reports, sync employee time sheets, and much more in just a few minutes (no exaggeration!).
2. Reduce Payroll Errors
With less time spent on data entry, a streamlined overview of your business’s payroll information, and even AI-powered error warning alerts, payroll software is designed to help business owners avoid expensive errors.
As payroll software providers also offer payroll tax penalty protections, adopting payroll software could save your business money that would have otherwise been spent correcting errors or paying penalty fees.
3. Run Payroll Reports
Most payroll software offers a variety of basic payroll reports that allow businesses to evaluate key payroll tax metrics, such as retirement plan contributions, withholding, wages paid, overtime, labor cost, and unemployment insurance contributions reports.
These reports come in handy as your business prepares for year-end payroll processing and tax time.
More advanced payroll software offers more robust reporting options, AI-powered financial analytics, and more customization options.
4. Payroll Software Is The Foundation Of A Payroll System
Outside of processing payroll manually, businesses only have two methods to choose from — paying for access to payroll software or paying someone else for their access to payroll software.
Even if you choose an accredited CPA, or one of the best professional employment organizations (PEOs), or pretty much any other third-party to run your payroll, they’ll likely be using payroll software.
There’s really no escaping the fact that payroll software serves as the central hub for all things payroll-related, from tax filing to benefits administration.
5. Provide Employees Access To Their Payroll Data
Manual payroll processing is usually limited to providing hard copies of all payroll data, while payroll software provides employees with unlimited digital access to their payroll records.
Employee portals, the digital dashboard where employees can manage payroll and HR tasks, allow employees to change their preferred payment methods, sign up for benefits, make time-off requests, and more.
6. Payroll Software Can Handle Complex Payroll Needs
A “complex payroll need” refers to any nonstandard payroll process that requires businesses to make additional payroll deductions, change employee payroll tax withholding, or include payment outside of hourly or salaried work.
Examples of complex payroll needs include businesses paying:
- Remote employees in different jurisdictions (local, state, and federal)
- Employees across multiple locations
- On-call employees
- Employees with unique pay rates and schedules, such as truckers or tipped workers
- Employees contributing to multiple employee benefits
Payroll software is designed to handle these payroll processes by offering features such as multistate payroll runs, automatic tax calculation, and benefits administration.
7. Get Help From Payroll & HR Experts
You can skip the internet searches and just make a call to get reliable answers to questions on compliance, hiring, employee management, and much more.
Not all payroll software providers offer expert support, but most will offer some form of HR support or an integration with one of the best HR software options.
What Are The Disadvantages Of Payroll Software?
In general, the disadvantages of payroll software are limited to its cost, initial time investment, and learning curve.
Most payroll software costs start around $44/month plus a monthly per person fee that starts around $6/person paid.
However, for this price, you’ll get feature-rich plans that include full-service tax support, benefits administration, employee management features, unlimited payroll runs, and much more.
Otherwise, like any new tool, payroll software requires a learning curve and time investment. Fortunately, most payroll software is designed to be easy to use and shouldn’t take too long to get used to.
The Bottom Line On The Benefits Of Payroll Software
Payroll software is a good investment for most businesses looking to streamline their payroll processes. However, the learning curve and cost of payroll software may be enough to cause some small business owners pause.
Fortunately, there are options for businesses with limited budgets. You can compare the cheapest payroll software solutions and choose options that best meet your business’s needs without breaking the bank.