Particularly for small businesses, payroll administration can be a burdensome process that includes gathering and organizing payroll reports, tracking deductions, and calculating overtime hours, commissions, bonuses, and any other “anomalies” of a particular pay period. This process is even more challenging when completed manually by a business owner, a single HR employee, or by a small staff, all of whom have other important and high-value tasks to fulfill for the company.
Although some small businesses perceive automated payroll management software as a tool best suited (or only necessary) for larger companies, the truth is that it offers a wide range of benefits to small businesses: reduced costs, improved labor allocation, streamlined tracking, consolidated data access, and employee-friendly features that increase job satisfaction and company-wide transparency.
In this article, we’ll explore how payroll software is an indispensable tool for small businesses seeking to turn their focus away from administrative tasks and back to central business operations.
Reduce Costs and Time Spent
Manually and internally managed payroll processes are expensive, time-consuming, and prone to produce costly errors. As a baseline consideration, more than 50% of small business owners spend upwards of five hours a month on payroll administration, which does not include additional (and necessary) tasks like recordkeeping, correspondence with employees, paycheck processing, payroll tax compliance, and more. Using this approach, business owners and HR staff are dedicating valuable hours to payroll-oriented tasks that are likely secondary to the core projects they’d rather pursue to achieve business growth and smooth day-to-day operations.
Without automated payroll software, small businesses also risk increasing costly incidents of human error like overpayment of employees, miscalculated taxes, or issues with underpayment that could lead to legal disputes with employees. Automated payroll software helps your business onboard new employees for payroll, track employee hours, successfully file payroll taxes, and pay your employees accurately and on time.
Improve Employee Satisfaction and Retention
With payroll management software, your employees enjoy 24-7, mobile access to an online self-service portal where they can view and manage their payments and review deductions, contributions, healthcare premiums and other information that ensures full, company-wide transparency in the payroll process. Should an issue or question ever arise as they review their payroll information, they can submit a ticket with the knowledge that the automated payroll system provides an objective source of information to employee and employer.
This emphasis on clarity and joint accountability between employer and employee can improve trust and increase employee retention, especially when paired with other HR software tools that support streamlined time and attendance, benefits administration, and performance management.
Streamline Tracking and Data Syncing
Just as employees benefit from easy and transparent access to data, payroll management software empowers you to track employee scheduling and payroll data in one consolidated system. With automated software, you can easily export reports that show hourly wages, reported overtime, and a range of other employee information that can simplify productivity evaluations and scheduling.
When paired with time and attendance software, you can also accurately incorporate all employee data regarding leave periods, holidays, compensatory leave and more, ensuring that your employees are fairly and accurately paid while minimizing incidents of overpayment.
Manage Compliance and Simplify Taxes
Since tax compliance costs are 67% higher for small businesses with less than 20 employees, small business owners should prioritize eliminating additional costs that are a consequence of payroll and tax errors.
Fortunately, automated payroll software simplifies tax calculations, withholdings, quarterly reports, end-of-year filings, and provides in-system alerts about deadlines or discrepancies. As part of a comprehensive HR software suite, payroll software also ensures that you remain aligned with all changes to municipal, county, state, and federal labor law policies to help you avoid violations, penalties, or time-consuming audits.
How Payday Payroll Software Can Help
Managing payroll manually can eventually create issues with inaccurate tracking, lessened productivity, or even unintended compliance issues that could lead to penalties. With Payday’s HR payroll software, you can reduce costs, eliminate time-consuming manual processes, grant greater transparency to your employees, and focus on constructive business projects (instead of compliance). Ready to focus on the work that is central to your small business’ mission, values, vision, and growth? Contact us today to start our collaboration.