The traditional method for conducting payroll was to track information by hand and write checks, then distribute the checks to each employee. Thankfully, technology has contributed a lot since then! There are now a wide variety of choices available for payroll processing, and indeed the right one is out there and waiting for you and your business. If you are searching for a better way to process payroll for your business, a good place to start is by understanding what your options are, at the highest level. Here is a high-level view of the payroll systems for small businesses.
Many people are still processing payroll the old-fashioned way: by hand. Those who have moved on with a more automated method can hardly imagine the manual work involved in that. However, those who continue to process payroll by hand have their own reasons. Processing payroll by hand means tracking information on paper or spreadsheets. Pay rates, vacation, employee information and tax information and more must still be tracked somehow.
For those processing payroll without any kind of automated system, start out by asking peers within the same industry as yours what they are using for a payroll system. That can be a good place to get the conversation started with moving your payroll system into the modern day. An automated payroll system can definitely offer time savings, and can also eliminate the frustration and manual work you are currently facing. It won’t take long for you to see its advantages.
Payroll software is another type of payroll system, and it is far more advanced than processing payroll by hand. (I refer here to payroll software that is installed and accessed on your own in-house computer system or network.) Employee information is set up and stored within the software, so there is no need to pull out paper files to access it. Other crucial information such as earnings and deductions, tax information, and even such complex things such as wage garnishments can all be set up and accessed from the payroll software system.
Tax filing may be done by you or outsourced to file by another party. By using payroll software, you can complete the payroll process much more quickly and efficiently. You can also provide employees with several payment options such as direct deposit or pay debit cards. These types of things are becoming more important as technology grows and time ticks forward. Using payroll software that is installed in-house allows for maximum control of the payroll system.
With the advancement of the internet, many functions are now able to be performed online, and payroll processing is no exception. Software as a service is similar to the above description of payroll software, only the software is accessed online, and the data and program are hosted outside your business location by your service provider. Using software as a service can help eliminate the need for a server and its maintenance, and it can also eliminate the process of performing software updates.
If you wish to simply leave your company’s payroll processing to another party, then using a payroll service might be the right payroll system for you. By using a payroll service, you and the service get the payroll information set up within the system, and the service processes payroll, delivers pay to employees, and files payroll taxes for you. Using a payroll service works well for those who do not have staff or resources to process in-house.
These days there are such a wide variety of payroll systems for small businesses. Check out all of your options and find the one that can handle the payroll needs of your business.
Susie Bowman is the author of this article on payroll systems for small businesses. Working with companies from around California and with the help of Red Wing Software, she has suggested purchasing payroll systems for small businesses.