Small businesses face unique challenges when it comes to managing their payroll. Inaccurate or delayed payments can create serious problems for both employers and employees. That’s why it is crucial for small businesses to invest in effective and accurate payroll software that is not a hassle to use. Some of the most critical reasons to invest in superior payroll software, include:
Compliance with regulations: Small businesses must comply with a variety of federal, state, and local payroll regulations. Effective payroll software can help ensure that all requirements are met, including tax filings, wage and hour laws, and benefits administration.
Timesaving: Manual payroll processing can be time-consuming and prone to errors. Automated payroll software can streamline the process, saving time and reducing the risk of mistakes. This allows small business owners to focus on other important aspects of their business.
Improved accuracy: Payroll errors can result in costly penalties and damage employee morale. Accurate payroll software can help prevent mistakes such as incorrect tax withholdings or miscalculations of overtime pay.
Enhanced security: Payroll data is sensitive information that must be protected. Effective payroll software can provide secure storage and transfer of data, reducing the risk of data breaches and identity theft.
However, with so many different solutions available to your small business, how can you assess which features and functionalities are suited for your company’s individual and unique needs? Some questions to consider as research options:
Do you have salaried or hourly employees?
Are taxes calculated and withheld?
Do you need to offer a direct deposit?
Will it integrate with our other software?
What are the monthly fees?
Listed below are various payroll software providers we have researched that are making great strides in the marketplace—and may be a perfect solution for your business.
Our team highly recommends this service. Gusto’s payroll service provides a streamlined, automated payroll process and brokered health insurance as standard features. Upgrading to higher service tiers gives you access to time tracking, full-service multi-state payroll, compliance alerts, and more. As of 2023, Gusto has worked with more than 300,000 businesses across the United States and processes tens of billions of dollars of payroll annually. According to Forbes, Gusto offers easy employee and contractor payroll, can automate tax filing and compliance. However, the per person pricing gets costly at scale, there are zero invoicing or accounts receivable features and payments can only be made in the US. 1
Workful is one of the newer online payroll services available. Many users praise the customer support. The geolocation time-clock tracking is easy enough to set up and ensures employees clock in and out from wherever you’ve set as appropriate. Also, employees can submit expenses through the app to get reimbursed with the next payroll run. However, there are limited reporting features that other software may offer and the set up is notorious for being time-consuming and not very intuitive.
According to Nerd Wallet, OnPay is a cloud-based, full-service payroll processing system with an affordable price point, making it a solid option for small-business owners. In addition to impressive payroll features, OnPay offers employee self-onboarding and lifetime account access as well as licensed brokers to help business owners choose and manage health insurance plans for their employees. While OnPay is competitively priced and won’t subject you to add-on fees, its single plan offering may not be right for businesses that want their payroll plan features to grow as they grow. Also, businesses interested in advanced HR support, or a wealth of third-party software integrations may want to look at alternative payroll software. 2
Last, but not least is Patriot Payroll. According to Fit Small Business, this software is best for mom-and-pop businesses that are looking for a low-cost do-it-yourself (DIY) payroll service. The software offers accounting, payroll, time and attendance, and other HR reporting features.
In short, payroll software is an investment that will affect your entire business every single week (at minimum). Finding a payroll software product that works for you can save you hours per week and increase your reliability as an employer. But you may not want to choose the first payroll software you discover. This is just a short list of options. If you have questions and can benefit from an expert opinion based on your unique situation, please contact the office of Jeanine Hemingway, CPA.