Using an Online Payroll Service
Advantages of Using Online Payroll Services
Managing payroll with online payroll services can have several advantages over managing payroll in-house. Many companies have already made the switch, along with a shift to other online HR management tools. If you are considering a move from manual systems to online payroll systems, the following potential benefits may help influence your decision.
Manual payroll systems generally require at least one person to export or manually calculate time and attendance information, calculate tax and benefit withholdings, draw up paychecks, and file forms with the IRS. This process can take several hours and must be completed every pay period. Typically, online payroll services perform these tasks automatically or with approval that simply requires a couple seconds of your time and few clicks.
Improved Labor Management
Since online payroll systems handle most of payroll’s time-consuming tasks, making the switch can help free up labor hours. If hours of an employee or department’s time were allotted to manage payroll, those hours can now be spent on other tasks – potentially revenue-bearing ones. Making the switch may also allow a company to eliminate a position altogether.
Decreased Potential for Errors
Automating payroll helps mitigate the potential for human error. Any time manual calculations must be done or information is keyed in, mistakes can be made that can cause employee discontent. This causes a loss of money for the company, or compliance issues. Streamlining payroll systems to export time and attendance information, automatically calculating withholdings, and drawing up paychecks with just a few clicks can prevent these errors.
Employee Access to Data
Most online payroll services allow employees and managers to access historical and current payroll data using mobile devices and defined login information. Having access to this information can improve employee satisfaction, while also saving human resources professionals’ time. Allowing managers to access payroll using mobile devices at any time establishes another way to review information, creating an additional error prevention check point.
It’s estimated that as many as 25 percent of companies pay penalties to the IRS every year, due to compliance errors. These errors are not intentional; most of them stem from the changing nature of regulations. The mandatory amount of time and effort required to keep all payroll employees up-to-date also inhibits matters.
The Key Benefits of Choosing the Best Small-Business Payroll Software
An owner may be able to simply pay a group of people consistently, but it’s often more difficult to also keep track of the right paperwork, pull reports, or handle special circumstances. As a result, for medium-sized businesses, it’s often one person’s dedicated job to take care of payroll or several people’s part-time job. For small businesses, it’s still very time-consuming, and owners struggle to keep up. Regardless of what they are using online payroll services for, small-business owners can also enjoy the following benefits as a result:
- You can save money by reducing data entry errors and sometimes avoiding large mistakes.
- You can save time, allowing you to focus your energy on core competencies and ignore the tricky business of conducting bookkeeping duties yourself.
- You can increase visibility for employees, as they’ll often be able to log in and view their account information, reducing any awkward, uncomfortable, or accusatory conversations.
- You can reduce the need to train or maintain payroll-related employees, reducing costs further and allowing HR professionals to focus on other important duties.
- You can ensure that tax information is consistent and accurate and have the information at hand rather than needing to calculate based on lists.
Is payroll easy to manage yourself?
Typically, it’s not. It must be compliant with local, state and federal laws that are subject to change.
If your company has employees in more than one city or state, payroll may become complicated. For instance, if your employee lives in one state and works in another, where do you report their income?
Local income taxes and fees may also be surprising. Did you know some cities charge employees a flat fee for every week they work?
Quality payroll services stay current with local, state and federal laws.
If you don’t work as an accountant, it doesn’t make sense to try to learn every aspect of payroll law. Focus on building your own business and choose a payroll-service firm right for you. Be confident every time you run payroll.
How do you choose a payroll service?
- Assess your payroll needs
- Review available payroll-service offerings
- Check the references of your top three choices
Cloud-Based Payroll Computing for Your Business
Businesses have become more environmentally aware and it has become increasingly common for a company to implement policies and practices for reducing carbon footprints and excess waste. Opting for a cloud-based payroll computing solution provides a “green” approach to a cost-effective and efficient payroll process.
Among other benefits, online payroll software greatly reduces paper usage, saves you money, and helps retain our natural resources for future generations.
In addition, more employees are taking advantage of direct deposit of their payroll checks. Online payroll software simplifies this process and, as a result, there is rarely any need for paper checks except in the case of special circumstances. An added convenience of using direct deposit is that employees no longer need to leave the office during work hours to deposit their checks and reduced driving time, as well.
By using an expert online payroll service provider, setting up your payroll online is quick and easy. In addition, the advantages provide benefits for both the employer and employees.
How Secure Are Online Payroll Services?
The increased threat of data breaches continues to push companies — leading online payroll providers — to invest in the most advanced security tools to store and protect client information. This includes:
- State-of-the art encryption systems (to save password-protected files in encrypted form)
- Redundant backup systems (duplicating key functions to increase reliability)
- Multiple server locations (storing the same information in more than one place as backup)