Much like building a skyscraper, building your company starts with a solid foundation. As exciting as it is to see the work completed on the tallest building you can construct, you’ll never be able to assemble the roof if the cement you build upon is cracked. In terms of business, the foundation you’ll want to build upon can include a variety of things, depending on the industry you work in. However, regardless of industry or the size of your organization, one thing must be considered when you look to build or maintain a successful business — your HR department.
Ensuring that your HR practices are effective provides a solid infrastructure for your organization. This is particularly important for small businesses, especially those with plans to grow. While there are a variety of HR tasks that you’ll want to focus on, payroll processes are key. For organizations with expectations of growth, there are a variety of things to consider when narrowing down vendors. Perhaps the best place to begin your search is by looking at small business payroll software vendors for scalable solutions that can serve as a strong foundational solution for your organization.
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What This Article Covers
How Does Payroll Software Benefit Small Business?
For many small firms, it may seem that an experienced HR administrator is more than capable of handling all tasks involved with payroll processing. However, payroll is far more time-consuming than many managers initially realize, and adding a payroll solution can alleviate this pain along with a variety of others. From saving time to ensuring compliance and accuracy, a payroll solution is a valuable investment that provides assistance throughout every step of the process.
Processing payroll each week is a deceptively complicated task. It requires an efficient system for processing pay, up-to-date knowledge of the most current regulations and tax law, and the time to complete all of the calculations involved in determining pay. Even for the smallest organizations, this can be an incredibly time-consuming process. Fortunately, implementing a payroll solution can streamline the entire process with little work on your part.
Many payroll solutions offer time and attendance functionality and integrations, allowing the system to automatically calculate things like how many hours an employee worked to determine how much pay they should receive for any given pay period. In addition to calculating hours worked, many solutions can also account for varying rates of pay, including overtime pay and shift differentials for certain types of shifts.
Unfortunately, payroll involves far more than just writing checks to your employees. You also need knowledge of compensation regulations and be able to properly deduct taxes as well as file them annually. If this sounds daunting, that’s because it is. Tax laws change frequently and can be difficult to understand, making the process of deducting taxes from employee paychecks incredibly difficult for anyone without a complete understanding of the laws and regulations that apply to payroll. Fortunately, many payroll solutions can assist with all of this.
Many solutions are able to provide assistance with taxes. Some systems can even file and pay taxes automatically — ensuring that your annual taxes are paid on time. Additionally, these products can check for updates in legislation to ensure that you’re always in compliance with the most current regulations.
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The final benefit of investing in a small business payroll solution is the infrastructure it helps you to implement, which supports the growth of your enterprise. Many small business products are designed to be scalable so that as your organization grows, your payroll solution can grow too. This means that no matter how big your team becomes, you’ll never have to switch products, ensuring a smooth transition from a small to medium-sized business and beyond.
Evaluating Payroll Vendors
Once you’ve narrowed down your list of top vendors and products, you’ll have to conduct your own evaluation to see which of your top picks is the best solution for your specific needs. In order to do this, you need to have a clear idea of what you need a payroll product to do and how you want it to function. Take a look at your current payroll practices and identify which pain points you want to address. You can use this assessment to determine which software features will be able to make payroll processing easier.
Assessing your needs will help you to develop a list of requirements that you can use to evaluate your top payroll products. You’ll want to consider not only what features are most important to you, but also the product’s deployment, how many employees the company is able to process payroll for, your timeframe for implementation as well as your price range. All of this information can help to guide your search and help you to ensure that you get exactly what you need from a payroll product. If you’re not sure where to begin when it comes time to look at software features, consider using our requirements template to help you build your own list of must-have features. Some features you might want to include on your requirements list include:
- Core HR: Core HR functionality assists you with a variety of tasks in addition to payroll, including time-off tracking, document storage, record keeping and more.
- Payroll Management: This is a core function of any payroll product that can assist with everything from payroll processing and tracking to bonuses and deductions.
- Workforce Management: This feature aids in time tracking, attendance, scheduling and even time off.
- Tax Services: A must-have for any payroll system, tax services support calculating taxes, tax document completion and filing.
- Compliance Management: With so many laws and regulations to keep up with, a compliance management function ensures that you’re always on top of it all. Managing everything from 401k to HIPAA compliance, this feature is an excellent safeguard to help make sure your organization runs smoothly.
The Best Payroll Software for Small Business
There are an overwhelming number of payroll vendors on the market and knowing where to begin your search can be confusing. That’s why we’ve compiled a list of our top picks for small business payroll software based on research from our team of expert analysts. The five products listed below stand out from the pack in terms of small business solutions (listed in no particular order).
This cloud-based solution is an affordable option that meets the needs of many small companies. The customizable solution follows a three-step approach that allows users to enter employees’ worked hours, approve the amount and then process the paychecks. The system also enables users to add tips to weekly payroll, which can then be included on year-end tax documents.
View all employee payroll deductions and employer contributions scheduled for any given pay date range, including future payroll dates. Patriot Payroll can calculate both pre- and post-tax deductions including wage garnishments, federal income taxes and 401k contributions. After inputting reported tips, they can be added to pay stubs and included in year-end tax documents such as W-2s.
Users can input hours worked and special considerations such as rate of pay.
Patriot Payroll also supplies a level of control to individual employees, who can utilize the employee portal to update their personal information, view and print pay stubs, clock-in, clock-out and more. Additionally, employees can reference employee handbooks and company policies through this portal. As an added benefit, Patriot offers users mobile capabilities, which allow employees to access many of these features directly from an internet-connected device