Think Your Business Is Too Small for Payroll Software? Think Again

Many businesses tout their employees as their most valuable asset. But how do they show that they really mean it? By naming an employee of the month? Holding a team appreciation day? Offering casual Friday? Sure, those are great, and they certainly can make an impact. But it may come as no surprise to learn that pay (and benefits) routinely rank high on employee most-wanted lists. Paying employees on-time and accurately is critical for businesses of every size.

For small businesses, however, payroll can pose a few problems. Cash flow issues can make payroll obligations tough to meet. And since small business owners typically juggle multiple responsibilities, just finding the time to process paychecks is often difficult. In addition to freeing you up to grow your business, payroll software can help you: 

Improve accuracy. Miscalculations and other errors can cause overpayments or underpayments and other costly accounting mistakes.

Increase compliance. By tracking employee data and generating government-required reports, payroll software can help you stay compliant with regulations and tax laws, keep track of records, and avoid penalties.

Centralize record storage. In addition to payroll, tax records, and reports, payroll software can store other employment-related documents.

Boost employee morale. Nothing matches the positive impact of paying workers accurately and on time. A recent Willis Towers Watson’s Global Benefits Attitudes Survey reported that 38 percent of employees are living paycheck to paycheck, and 39 percent could not come up with $3,000 in an emergency. And those results came from people surveyed before the global pandemic began.

If you want to make your payroll process easy then a payroll software like one of the 8 featured here could be exactly what your small business needs.

How to Choose the Right Software for Your Company

The type of business you’re in and how you pay your workers will influence your choice of payroll software. For example, if you own a trucking company, you might need to pay drivers by the mile. Agricultural businesses often employ seasonal workers. And many companies use independent contractors and must classify them and compensate them appropriately. The payroll software you choose should accommodate your needs.

In addition to the specific requirements of your business, some general features to consider include:

• Ease of set-up and use. Changing from a paper-based manual payroll system to payroll software shouldn’t mean a steep learning curve. Set-up should be simple, enabling you and your employees to learn and use it easily.
• Cloud or desktop-based. Both offer benefits, but working at home--both now and beyond--is easier if you can access pertinent information and download software updates via the cloud. Just make sure you’re satisfied with the security your vendor offers.
• If cost is a significant factor in your choice of payroll software, make sure that pricing is transparent and that you understand whether adding services or employees will mean additional fees. Ideally, the service will be able to grow with your business without growing in cost.
• Customer support. Even when a payroll system is easy to use and reliable, you’re probably going to need customer support at some point. Consider the type and level of support you’ll receive from the payroll software providers you’re exploring. A single point of contact, accessible through phone, email, and chat is ideal, as is a timely response.
• This is where you might find the greatest difference among providers. What options in addition to regular payroll services do they offer? How fast can you pay employees if a need arises outside a typical payroll cycle? 

For example, if you own a restaurant, the ability to pay out tips the very night they’re earned would benefit servers and bartenders. Or if you need to attract and retain low wage employees , paying at the end of a shift can reduce no-shows, boost morale, and help you retain employees in high-turnover positions.

Small businesses often need better ways to manage how they pay their people. You might think your company is too small to afford payroll software. But given that it can significantly improve the way businesses operate, we’d encourage you to reconsider the benefits of payroll software.

To lean more about paying employees and managing reimbursement of business expended, download our eGuide.