Any business that has more than one employee must have a payroll system. Paying employees consistently and with no delays not only impacts their morale, but it also reflects the company’s financial stability. Moreover, it is a requirement for compliance with federal and state laws. While this is a complex process, having an efficient system helps streamline and centralize the payroll method. But first, let’s discuss what is payroll management process?
In essence, the payroll management process refers to the administration of an employee’s financial records which includes the salaries, wages, bonuses, deductions, and net pay. These records must be maintained and kept by the employer for federal requirements, especially when it pertains to payroll taxes such as Income Tax Withholding Records, Social Security (FICA) Records, and Federal Unemployment Tax (FUTA) Records.
In the U.S., the most common pay length period is every two weeks. A survey shows 36.5% of private companies give payments to their employees bi-weekly. It is followed closely by weekly payments with 32.4% of businesses. Establishing your payroll period is one of the fundamentals of managing your payroll system. This organizes the process and fosters consistency for your employees. It impacts your business with the following:
No matter the size of the organization, managing the payroll system is crucial. Those with fewer employees can use a one-write system. New business owners who are not knowledgeable in the process may find the procedure challenging because of the various federal and state laws requirements that must be complied with. Hence, some businesses outsource their payroll services to ensure compliance with all applicable laws. Those who prefer to do it on their own, however, purchase an automated payroll system because it is cost-efficient and time-saving. For more information on what is the best payroll software for small business check out our detailed guide to top solutions.
Payroll software is one of the first HR software solutions small business owners must implement for their growth as it covers the basics for future HR processes, according to a survey of software buyer interactions. Systems for “time and attendance” and “personal tracking” come next, respectively. Forty-two percent of payroll software buyers are SMEs with 1-50 employees as they understand the potential roadblocks it eliminates such as inaccurate paychecks and vexed tax authorities.
After discussing what is payroll management process, it’s important to look at solutions that help streamline it. Aside from outsourcing, a business can implement a payroll software to accomplish their payroll processes. This is to ensure compliance with legal and tax requirements and to simplify the method of paying employees. For more information on popular solutions check out our guide to top 20 payroll software for payroll service providers and accountants. The following are reasons to consider having a payroll software for your business:
If you’d like to learn more about how much do payroll companies charge check out our other guide on that topic.
Here are some of the key features of a payroll software:
If you are ready to try out some payroll software solutions after learning what is payroll management process, you may start looking at these leading products in the niche:
Gusto is an online solution that provides HR services catered to small businesses. It can support teams, manage benefits, run payroll, and more – all in one platform. The system also provides a hassle-free navigation experience for users by allowing them to easily retrieve valuable information such as W-2s and contact data. Furthermore, Gusto ensures compliance, can integrate with a wide array of third-party apps, and streamlines HR processes in general.
OnPay is one of the most cost-efficient and affordable solutions in this category because it allows you to handle an unlimited number of payroll runs for 1099 contract workers and W-2 employees per month. The system also eases the way you manage payroll taxes since it can automatically calculate your federal and state payroll taxes. The vendor is so confident in its product that they’ll take responsibility if it causes any errors in your tax filing.
Patriot Software is another budget-friendly payroll system thanks to the two packages it offers: Basic and Full Service. The first one is ideal for small businesses and provides a simple 3-step process of running payroll. Tax-related processes, however, such as tax liabilities reports must be handled by themselves. The Full Service Payroll, on the other hand, will take care of all the payroll filings including local, state, and federal taxes.
Sage 50cloud Payroll is for SMBs in the UK and offers more than just payroll-related services. It also features tools for automating various day-to-day tasks, providing insights, engaging with the workforces, and more. It’s also a part of, and can seamlessly integrate with, the widely-known Sage ecosystem solutions such as Sage Payments and Sage 5cloud Accounts. It’s also accessible through mobile devices like smartphones and tablets.
More than just a payroll system, Paycor is an integrated HCM (Human Capital Management) solution. It offers tools for timekeeping, onboarding, tax compliance, recruiting, and more. The system provides a modern solution for practically all aspects of people management – right from recruitment process to nurturing your employees. This provides your company a single source of your workforce data which removes the need for switching between multiple applications.
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