If you were to compare the payroll solutions available a decade ago to today’s business ecosphere, it’s clear that it has evolved. It used to be something only HR personnel handled.
Payroll functions involve heavy amounts of paperwork – literally. so. much. paperwork. Whenever someone submitted a manual change, it could result in countless errors. Common issues stem from lack of communication or understanding of what was needed from management or employees.
Payroll solutions for small business
Today, employees, HR managers, and business owners all have their own roles to play to help keep payroll operating the way it should. From communication to employee elections, it all works together to cover any unforeseen gaps.
When payroll functions are manually handled, there is a lot of time eaten up that could’ve been better allocated to other HR duties. In a 2018 small business taxation survey, 48% reported federal tax management, payroll, and other accounting duties only takes them 1 to 20 hours to complete. The remaining 52% reported it takes them anywhere between 21 to 120 hours to complete.
Spending more than half a workweek towards payroll responsibilities in a small business with 30 or fewer employees is and should feel like an embarrassment. There is a better way to handle these HR responsibilities and achieve more efficient practices.
Let’s remind ourselves that there is a tremendous amount of pressure on whoever manages payroll at your small business. They have to validate time worked, benefits disbursement, and ensuring funds get delivered via direct deposit for those expecting it.
There are new services to help reduce the chaos HR managers face. For many types of businesses, making the switch to cloud-based and app-supporting payroll solutions has increased employee communication and engagement. If you are ready to make the switch to modern-day technology in payroll solutions, here is what you need to know.
What are the different payroll solutions available to small businesses?
First, you should ask yourself what are the best software for payroll for small business? A quick internet search will show you comparisons of popular and trending software options, like Gusto, Intuit, Zenefits, Workday, and more. Then comes the decision part. What is the best payroll software option for your small business?
How to determine your payroll needs
Here is when a checklist comes in handy. Try this for your small business:
- How big is your workforce? Use this number to narrow your payroll software pool.
- Do you offer direct deposit? This answer can quickly eliminate quite a few options.
- What time clock module do you use? Look at the software you’re considering and see if it’s compatible with the existing time clock? If your HR budget allows, invest in both a new payroll solution and upgrade your time clock module for easier syncing and set-up.
- Do you need benefit offerings and management included? This answer will also reduce the number of considerations.
- Does the program process federal and state taxes autonomously? If your HR manager will need to edit payroll for federal and state taxes, then it will not save them any more time or improve efficiency.
- Is employee self-service (ESS) included? Service-based small businesses should look at software types that support ESS for easy employee management while they are on-the-go and away from the home office.
- Can employees request paid time off or personal/sick time through the module? Everything you can do to avoid handwritten changes that affect the payroll process is better for you in the long run. If time off requests can be communicated electronically and factored into payroll processes without a second thought, it improves effectiveness for all.
- Are there any free trials or demos available? See if the product is easy-to-use and will adapt well to your business’ needs by electing a free trial.
Payroll in-house vs outsourcing
Some small business owners would rather all payroll duties to be handled outside their business. One of the advantages of outsourcing payroll solutions is that it can be cheaper to have outside management than a full-time HR manager or an HR team.
On the flip side, when payroll is processed in-house, it gives employees a point-of-contact. This person can be their go-to should they have questions about withholding taxes, benefits election, or other HR-related questions. If it’s outsourced, you will be the sole contact, and you’ll need to be prepared to answer these types of inquiries.
How to process payroll in-house
Processing payroll in-house is a multi-step process that first begins with a time clock module and payroll software. Once the set-up is complete with employee data, then the time clock will record hours worked. The software will then take this information and auto-determine withholding taxes, benefits deductions, applying time off allocations, and more.
Whoever is managing payroll at your small business needs to stay on top of these processes. They should check for any missing information and continue data entry and ongoing management.
Advantages of outsourcing payroll services
If in-house payroll management isn’t for your small business, then you will have complete access to many advantages, like these:
- Experienced and well-trained HR managers
- Around-the-clock technical support
- Cloud-based information storage for easy retrieval
- Latest payroll software technology
- Access to a wider network of benefit plans
- Improved employee retention with performance incentive offerings like gift card services, discounts on personal purchases, and more
PayTech’s Comprehensive Payroll Solutions
Located in the North Phoenix area, PayTech has the capabilities and software options to improve payroll for small to large businesses. We offer comprehensive payroll solutions with competitive pricing. Our satisfied clients range from enterprises and CrossFit franchises to small mom and pop shops in Arizona and across the U.S.! See why our payroll plus offerings are among the best in the business. Start a conversation with our team today by calling (602) 892-4796.