The Essential Payroll Services for Small Businesses

Payroll software systems can help your small business streamline payroll processing while ensuring compliance with tax mandates and other regulations. In addition, payroll services for small businesses can streamline the most tedious and time-consuming processes through automation, allowing you to concentrate on core tasks for business growth.

Knowing what to look for when selecting a payroll software product can be challenging. Before taking a deep dive into the payroll features you’ll want in a software solution, let’s take a look at what payroll software is.

What Is Payroll Software?

Your payroll has many moving parts. For example, there are new employees to add and departing employees to remove. In addition, you need to track changes to pay rates, benefits, and taxes.

With so many variables, payroll is a process fraught with the risk of errors. And yet it’s the most essential finance system you need to get right. Problems with payroll can significantly affect employee morale, engagement, and trust.

Payroll software systems help simplify and manage employee payments, tax withdrawals and reporting, and compliance with federal and state regulations.

Payroll needs to integrate closely with your general ledger and HR systems to ensure smooth operations. When done correctly, your payroll software system simplifies operations, reduces or eliminates manual data entry, and reduces the risk of mistakes.

Critical Features for Payroll Software Systems

Before choosing the right tools for your small business, let’s look at some of the payroll features to consider carefully.

Rules Automation

Your software should allow you to create rules and calculations that automatically integrate with each other. For example, when overtime hours are entered and approved, pay rates and total pay should update automatically.

Self-Service

Both employees and managers should be able to easily use time entry, time approval, and other functions on any device that’s connected to a secure network. An employee self-service timekeeping solution within your payroll system means there are fewer systems to integrate and makes it easier for all employees.

Direct Deposit

Most employers offer or require employees to be paid via direct deposit. Using direct deposit eliminates the need for paper checks and ensures a secure, simple transfer of funds from the company bank account to employee accounts.

Employees will appreciate the ease of access to their money, and in many cases funds will be available sooner. A payroll management system should allow for simple, integrated direct-deposit functions.

Tax Functionality

Taxes are a complex and necessary function that a payroll processing system should make simple.

Automated tax functionality will calculate your federal, state, and local taxes owed, file returns, and create W-2 and 1099 forms for employees.

Managing taxes can be time-consuming, especially when employee tax forms are due at the beginning of each calendar year. However, managing these processes helps eliminate errors and reduce the risk that your business is audited.

Compliance Management

The number of federal, state, and regional compliance mandates is regularly growing. Many of these mandates involve securing the data of customers and employees. In addition, employee and tax laws are constantly changing.

As employees increasingly work remotely, your organization may need to comply with regulations in multiple states. Therefore, your payroll system should contain features that will automatically update your software to reflect changes in employment and tax laws.

Compliance management features often run in the background but are essential to ensure your organization is in sync with changing rules and regulations.

Integration with General Ledger

Payroll and general ledger functions are inextricably related. Therefore, you want a system that allows for easy payroll integration with your general ledger, leading to consistent reporting, better accuracy, and time savings.

Insights and Reporting

Advanced payroll software systems go beyond the basic functionality needed to manage each pay period. Look for systems that have automated reports that help you better understand your payroll, identify trends and help manage your business and its people better.

Partner with Exact Payroll

At Exact Payroll, we offer powerful payroll solutions for businesses large and small. Our payroll processing solution automates your payroll and delivers reports, including a payroll recap, payroll register, master data changes, and payroll worksheets. Schedule a free consultation with Exact Payroll to learn more about how we can address your greatest payroll and HR needs.