Although crucial, payroll management is incredibly time-consuming and a tiresome venture that you have to perform daily – well, that is, if you are doing it manually. With payroll administration not creating any direct revenue but incredibly vital, you will have to maintain its costs as low as possible while also ensuring that the entire procedure runs seamlessly.
- What Is Payroll Management Software Part 1
- Types of Payroll Software Part 2
- Advantages of Payroll Software Part 3
- 7 Key Functionalities of a Payroll Management Software Part 4
What Is Payroll Management Software?
Payroll software is a human resource tool that streamlines the process of paying workers for the time they have worked. Besides performing complex paycheck computations, this comprehensive system autonomously tracks and registers worker attendance crucial for developing paychecks. Using insightful reports, the payroll software intelligently creates individual pays or directly deposits funds into employees’ accounts.
Meticulously designed, a payroll administration solution standardizes, automates, streamlines, and centralizes these workforce procedures:
- Handles expenses
- Administers benefits and bonuses
- Manages worker leave
- Manages reports, pay slips, and forms
- Keeps payroll records
- Manages income taxes and deductions
- Tracks time and attendance
Types of Payroll Software
We can categorize payroll tools into two major types:
1. Integrated Payroll Management Software
In this model, the payroll administration software is incorporated in related business platforms like:
- Accounting systems
- Human resource management systems
- EPR (enterprise resource planning) systems
This type can either be charged either separately or as add-on apps and is perfect for large companies that demand intricate payroll functionalities.
Good examples of integrated payroll management software include:
2. Dedicated Payroll Management Software
This version is designed as a separate solution and offers specialized functions beyond the basic payroll tasks. Dedicated payroll administration is ideal for small organizations.
Good examples of this version include:
- Intuit Payroll
Advantages of Payroll Software
Incredibly intelligent, a payroll system can greatly benefit your organization. To put this in context, this system aids your organization in these ways:
Helps Avoid Errors and Save Time
Payroll procedures are time-consuming, complex, and prone to errors if executed manually. In practice, misplacing a decimal point or zero can wreak havoc on your financial reports. However, with payroll software that virtually syncs and precisely consolidates all your workers’ information and regulatory rules as well, you can quickly and accurately perform financial computations.
Pay Employees Correctly
Paychecks errors are common in many organizations, especially with those using manual methods to process them. However, as much as we accept the fact that it is human to error, repetitive paycheck mistakes breed distrust and greatly demoralizes your employees.
Precisely designed to ensure accurate and consistent calculations, a payroll management system automatically incorporates vital payment features like benefits, deductions, salary grades, and allowances, thus guaranteeing correct payment for every employee.
Pay Taxes Correctly
Besides ensuring accurate wages for your employees, this state of the art software lets you virtually monitor both offshore and inshore tax requirements. With varying taxation rates, it is imperative for you to remain in compliance with the relevant tax jurisdictions.
To easily calculate the total amount of taxes required and amount paid per staff member, most payroll management tools are designed with built-in location-based tax computation and reporting features.
Offering clear, perfectly structured reports with crucial business information like timesheets, agreements, and benefits, a payroll administration program helps develop transparency in your organization. This creates a perfect dispute-solving environment that ensures a quick, decisive, and conclusive consensus.
Key Functionalities to Consider in a Payroll Management Software
From an entrepreneur’s perspective, there is great appeal and flexibility in directly depositing funds in your workers’ bank accounts. Besides convenience and speed, the risks of lost checks, global deforestation, and fraud are incredibly low. So for a payroll management system, it is important to ensure that it supports direct deposit.
Tax compliance and reporting go hand-in-hand. Often, taxation authorities demand a regular report regarding disbursement amounts. With tax evaders actively hunted and slapped with heavy penalties if found guilty, you cannot afford not to have a full report about payment amounts.
So, since appearing in the tax authorities’ good book is crucial for the ultimate success of your company, consider a payroll software with robust reporting features.
Employee Onboarding or Termination
An excellent payroll management system should be designed with a powerful administration panel to enable you to remove or add employees easily.
Income Types Feature
This capability lets you understand varying types of income. By doing so, you can do a follow-up for each payment quickly. Some of the most common types of employee payments include:
— Expense reimbursements
— Holiday pay
System Integrations (if applicable)
Although some payroll management solutions are designed to be a part of a larger program like HM, ERP, or accounting, it is imperative to choose a system that integrates with them if it doesn’t. As your organization grows, the number of employees gradually increase as there are more tasks at stake. As a result, you will need to process more complex payrolls, thus requiring you to take on more applications such as recruitment, reporting tools, sales ledgers, and timesheets.
System integration also allows you to seamlessly export and import files across platforms, thus saving you the pain of manually keying in information during data migration.
Of course, you want a flexible payroll management system that will stand the test of time and accommodate the exponential changes in your organization. As a futuristic entrepreneur, you should picture your organization in ten years and consider key features that will be relevant then.
For rapidly growing organizations, you anticipate more employees, users, and possibly a few branches under the mother company. Depending on your growth pace, you need to choose a scalable tool. By doing so, your growth trail will not be littered with many purchases of payroll management software, thus saving you both cash and time.
Another essential aspect you must consider is the ability of your software to help you remain in good standing with the taxation authorities. An excellent payroll management tool should automatically deduct and report tax payments to the appropriate authorities.
Other Capabilities to Consider Include:
- Employee access to pay stubs and W-2s
- Deduction types
- Contractor payments
- Off-cycle payroll