Payroll is the compensation paid to employees for work performed. It can be a complex process that requires strict adherence to federal and state laws and extensive record-keeping.
A payroll solution maximizes accuracy and decreases risk by automating calculations and preventing human errors. Some also offer penalty protection to help protect against costly penalties for tax noncompliance.
Time & Attendance
Time and attendance systems are the new face of employee tracking solutions, allowing digital information to replace traditional pens and paper. These smart technology tools save businesses money and time through increased efficiency.
They allow employees to clock in or out using timeclocks, smartphones and internet-connected devices. The software can then instantly transfer this data to payroll, removing the possibility of human error and improving compliance. Some systems even have the option to restrict employees clocking into devices getting Wi-Fi from certain IP addresses, eliminating potential time theft issues.
These systems also track and manage paid time off, schedules, labor reports, etc. This allows managers to closely monitor staffing levels and ensure compliance with labor laws and company policies.
These systems make identifying issues like early or late clock-ins easier, reducing the likelihood of inaccurate payroll processing, which can incur large tax penalties. By quickly identifying these issues, small business owners can avoid costly errors and save resources for expansion or reinvestment. They can also streamline administrative tasks to reduce labor costs and improve productivity.
Payroll
One of the most important responsibilities of small business owners is completing payroll. Employees rely on you to pay them on time and accurately, and mistakes in this area can cost you money or hurt morale.
When choosing a payroll solution to small businesses, look for a provider known for customer service. A good company will have a team to help you with any problems that might arise during the onboarding period. Suppose you are a small business with limited resources. In that case, finding a tool to customize how often you want to be contacted about payroll-related issues is also helpful.
Ensure your chosen solution will integrate with the systems you rely on, such as HR software and accounting programs. Check if the tool offers flexible APIs or prebuilt integrations. You’ll also want to ensure it provides employees with self-service features, including online pay stubs and end-of-year tax forms. Some solutions also offer employee self-service tools for other functions, such as new hire reporting and health insurance reimbursements.
Taxes
Payroll taxes are complicated and constantly changing. Failure to file properly can lead to IRS penalties, labor law violations and employee lawsuits. The best payroll services will provide compliance support to keep you in compliance.
Keeping track of federal, state and local tax deposits, filings and reporting requires time and effort that can be better spent on core business functions. In addition, employee satisfaction plummets when companies bungle paychecks.
Using a full-service payroll provider saves you time and ensures your team receives their paychecks promptly via direct deposit. These providers calculate wages and deductions accurately and will send payments and filings to the IRS and state tax agencies on your behalf. Additionally, they’ll handle year-end filings, W-2s and 1099s for contractors. They’ll also help you set up health, disability and retirement plans and manage paycheck deductions. Prices for these solutions vary by vendor and subscription plan. They start at around $40 a month and $6 per employee. Most offer direct deposit, two-day processing, and live customer support (hours vary).
Employee Self Service
Employee self-service, ESS, allows employees to manage many payroll-related tasks remotely. They can review their paychecks, update personal information, and submit leave requests via an online portal.
The streamlined system is accessible 24/7 and eliminates time-consuming manual processes often riddled with errors. In addition to reducing administrative burdens on HR teams, it improves communication with team members and gives them autonomy over their information.
The platform can also be used to file expenses and keep track of company-sponsored benefits. And with the growing popularity of remote work, an ESS portal can provide a single hub for employees to oversee their information and payment processes regardless of where they are located. This is especially useful in today’s global workforce. A centralized system that’s easy to use and can be updated in real-time is essential for businesses of all sizes. The right solution can also help companies reduce compliance worries. Keeping up with ever-changing regulations cannot be easy when employees manage the information manually.
Reporting
Payroll is one of many expenses that small business owners have to consider. Accounts payable (AP) and accounts receivable (AR) are important factors in cash flow management. An accurate understanding of your business’s total AP during a given period helps small business owners know how much they should have on hand to pay their vendors while keeping in mind that they must leave enough funds to cover the payroll cost.
While there are free payroll services that provide basic features, they offer a different level of accuracy than full-service providers. A free payroll service can cost a business more money by introducing calculations and tax filing errors, so using a full-service provider is generally worth the investment. The providers featured in this guide include various services, including unlimited pay runs, paid time off tracking, two-day direct deposits and employee self-service portals. Most also integrate with accounting software applications for easier monitoring of payroll expenses. Some, like SurePayroll, even offer a guarantee that their payroll taxes and deductions are calculated correctly and filed without penalties.
