How to choose the right payroll software for your small business

Payroll software is used to design, automate and manage the process of making payments, which involves calculating payments, withholding tax and depositing monthly payments to employees’ bank accounts.

The advantage of using Payroll software is that it relieves accounting personnel of a lot of administrative tasks associated with making payments to employees, that would otherwise be very time-consuming. It also reduces the instance of mistakes caused by human error.

Companies with a large number of employees rely heavily on Payroll software and on its reporting features. This is not to say that a small business as yours has no need of a payroll software.

Why you need Payroll Software

Easy calculations

Small businesses spend a lot of time doing payroll every month. It requires accuracy to pay employees the right amount of money they have earned. Using a payroll software automates all these processes, and also eliminates the probability of error in calculations. With manual payroll system out of the way, the business owner or an account personnel can focus on other tasks. The process is productive and effective in saving time and money.

Tax management

Computing taxes can be a headache. You need not to look for piles of pay-slips to see the records for tax payments. Through an automated payroll, data are easy to collect and pull-out from the system to provide you with accurate tax records. Avoid the errors of manually computing taxes of salaries by using an automatic payroll system and it reduces paperwork.

Inhouse control

A good payroll software requires no expertise making it easy to use. Therefore, you no longer have to hire outsiders to handle your payroll. You are not only saving time and money when using a payroll software, you have complete control of your financial information as well as your data confidentiality.

How to choose the right payroll software for your business

Ease of Use

Entrepreneurs/ small business owners usually take up more roles than just being a founder. This includes handling their finances, sales and marketing, to mention a few. It is most likely that as a founder, you are in charge of payroll. It is therefore important that you choose a payroll software that is seamless to use — one that does not require expertise. Spending hours trying to figure to how it works or always calling the help line in order to put you through doesn’t seem like a good idea. Rather, opt for one that will allow you pay your employees, send them payslips and automatically send the data to your accounting system in no time.

Functionality

Besides payroll processing and the handling of all tax obligations, there are essential features to look out for, such as multiple pay options, like direct deposit, paper check or prepaid debit card, reporting, multiple wage rates, income types, deduction types, contractor payments, off-cycle payroll, paid-time-off management, workers’ compensation administration, unemployment insurance.

Pricing

As a startup, you don’t want to spend money as they come, it is important to save money for rainy days. Before choosing a payroll software, research the market to find out about different payroll software and their cost. It is important to consider your budget. There is always something for everyone, which is why you should choose a software that best suits your budget and still has all the essential features.

Flexibility

Different businesses have different needs. Choose a flexible payroll software that can be suited to understand your needs and meet them.

Free trial

Some payroll software offer a free trial so you can find your way around the solution at no cost. A free trial helps you know exactly what you want to purchase. This will allow you make a decision — if the software is right for you. This way, you are not stuck with the software until your subscription expires.

Good customer service

Handling a payroll software may not be entirely easy. You might want to reach out to the provider customer service to ask questions. The company should have an excellent customer service that ensures your queries are attended to, provide assistance and your needs are met. If you are left on hold for more than 30 minutes, walk away.

When choosing a payroll software for your small business, consider the size of your company, the available budget as well as level of comfort and familiarity with regulatory and legal payroll considerations.