When it comes to keeping an accurate and up-to-date record of employee wages and hours worked, payroll software is the answer.
Not only does payroll software keep track of employee hours, it can also automate the process of generating paychecks and issuing payments. In addition, payroll software can help businesses stay in compliance with tax laws.
Choosing the best payroll software for your business in 2022 can be a daunting task. There are many different types of payroll software on the market, so it can be difficult to decide which one is right for your business. However, by taking into account the features that are important to you and your employees, it can be an easy decision.
In this article, we will cover the following:
- What is payroll software?
- Benefits of using payroll software
- Different types of payroll software available
- Features to consider when choosing payroll software
- Best payroll software options in 2022
- Implementing your payroll software
- Making the most of your payroll software
If you are ready to find the best one for your business in 2022, keep reading — you’ve come to the right place!
What is payroll software?
The word ‘payroll’ first came into use in the 1700s when business owners realized that they needed a way to keep track of the wages paid to their workers. However, it wasn’t until the 1900s that the first payroll software was created. Today, payroll software is used by businesses of all sizes to manage the wages and salaries of their employees.
So, what is it? Payroll software is a computer program that helps businesses track employee wages and deductions, as well as tax payments. It can also help businesses create paychecks and invoices, and manage employee benefits.
Most payroll software offers the following features:
- Employee management: This includes adding and editing employee information, such as name, address, Social Security number, and pay rates.
- Tax management: Allows businesses to calculate federal, state, and local taxes, as well as employee deductions.
- Check writing: Automates the process of creating paychecks for employees.
- Reporting: Generates detailed reports on employee earnings, taxes, and deductions.
There are many types of payroll software available, from simple programs that handle the basics to more complex systems that offer a wide range of features. The best software for your business will depend on its size and complexity, as well as your budget.
Benefits of using payroll software
Nowadays, most businesses make use of payroll software to manage their employee payments. This is because payroll software has a plethora of benefits to offer in terms of time saving, money saving, and organization.
Such benefits include:
- Faster and more accurate payments. Payroll software automates the payment process, making it faster and more accurate. This is because the software can automatically calculate employee wages and deductions, eliminating any errors that could occur when doing these calculations manually.
- Increased efficiency. With payroll software, businesses can manage their employee payments more efficiently. This is because the software automates many of the tasks related to employee payments, such as creating payslips and tracking hours worked.
- Reduced costs. Payroll software can help businesses reduce their costs by automating certain tasks, such as printing payslips and sending wage payments. Additionally, the software can help businesses save money by identifying potential deductions and tax savings opportunities.
- Improved compliance. By using payroll software, businesses can improve their compliance with government regulations related to employee payments. This is because the software often includes features that automate the submission of necessary reports and filings.
Thus, it is clear that businesses can benefit a great deal from using payroll software. In fact, many businesses find that the benefits of using the software outweigh its costs.
Different types of payroll software available
As with any automated workflow tool, payroll software come in all shapes and sizes. There are dozens of different software applications on the market, each with its own unique features, benefits, and drawbacks. It can be difficult to decide which application is best for your business without doing some research.
The most common types of payroll software include:
- Time and attendance software is used to track employee hours and attendance. It can also be used to generate pay stubs and calculate employee wages.
- Payroll processing software helps businesses manage their payroll tax obligations, including calculating withholdings and filing tax returns.
- Employee self-service software allows employees to view and modify their own payroll information, such as pay rates and deductions.
- HRMS (Human Resource Management System) software helps businesses manage employee files, benefits, and other HR tasks. Many HRMS applications include payroll functionality.
Each of these types of software has its own advantages and disadvantages.
Time and attendance software is generally very affordable, and it can be used to track employee hours for both hourly and salaried employees. However, it may not include all the features you need, unless you are a particularly small business and do not need added automation.
Payroll processing software is more comprehensive than time and attendance software, but it can be more expensive. It includes all the features you need to manage your payroll tax obligations, and it may also include other features such as HRMS functionality.
Employee self-service software is a great way to give employees control over their own payroll information. However, it can be expensive and may not include all the features you need.
HRMS software is the most comprehensive type of payroll software, and it usually includes all the features of time and attendance software, payroll processing software, and employee self-service software. However, it can be expensive and may not be necessary for small businesses.
The software you choose should reflect the needs and goals of your business — so it’s best to do your research and find the tool that best suits your specific requirements.
Features to consider when choosing payroll software
Before you select one specific payroll solution, you first need to consider what features are important to your business. The most common features include:
1. Tax filing — the software should be able to handle all required tax filings for your employees, including federal, state and local taxes.
2. Automatic pay calculation — the software should automatically calculate paychecks based on hours worked, overtime, bonuses and other factors.
3. Direct deposit — employees should be able to receive their paychecks through direct deposit into their bank accounts.
4. Employee self-service — employees should be able to view their pay stubs and W-2 forms online, as well as make changes to their personal information.
5. Reports and tracking — the software should generate detailed reports on employee wages, hours worked, taxes paid and more. This information can be helpful for tracking budget and compliance goals.
Once you’ve determined which features are essential to your business, you can begin to evaluate different payroll software solutions.
Best payroll software options in 2022
Now that you know what to look for in the best payroll software of 2022, it’s time to find the right one for your business. Here are some of the top options to consider:
This cloud-based payroll software is designed for small businesses and offers a wide range of features, including automatic tax filing, time tracking, and employee onboarding. Gusto is also highly affordable, with pricing starting at just $39 per month.
Another popular cloud-based payroll software option, Xero offers a wide range of features, including invoicing, expense tracking, and payroll. It also integrates with a variety of other business applications, making it a good option for businesses that want a comprehensive solution.
ADP is one of the largest payroll providers in the world, and their software offers a wide range of features, including onboarding, time tracking, and tax filing. They also have a large customer base, which can be both a pro and a con depending on your needs.
Another large payroll provider, Paychex offers a wide range of features, including time tracking, onboarding, and tax filing. They also have a large customer base and offer both cloud-based and desktop software options.
Implementing your payroll software
So, you’ve found the best payroll software for your business — congratulations! But what’s the next step? How do you actually go about implementing it?
Well, the first thing you need to do is figure out who will be responsible for managing the software. This could be a specific individual within your company, or a dedicated team. Whoever takes on this role will need to be familiar with the software and how it works, as well as with your company’s specific payroll procedures.
Once you’ve appointed someone to manage the software, run them through the following steps:
1. Familiarize yourself with the software and how it works. This might involve taking a course or reading up on the specific software you’ve chosen. For anyone in your business who will be using the software, consider running training sessions to make sure everyone is up to speed.
2. Set up the software and create user accounts for all those who will need access. Remember to set up different user accounts for different levels of access, depending on who needs to see what.
3. Import your data into the software. This could include employee details, payroll information, and any other relevant data. Make sure you have all the relevant information on hand before you start importing!
4. Configure the software to meet your specific needs. This might involve setting up pay rates, creating employee groups, and configuring tax settings.
5. Test the software. Make sure everything is working as it should and that all your data has been imported correctly. If you spot any errors, now is the time to fix them.
6. Go live! Once you’re happy that everything is working correctly, it’s time to switch over to the new software. Make sure you give yourself plenty of time to do this so that there are no disruptions to your payroll process.
7. Manage and maintain the software. The person responsible for managing the software will need to keep an eye on it to make sure it’s running smoothly and meeting your business’ needs. They might also need to carry out updates and upgrades from time to time.
Making the most of your payroll software
Advances in technology have made it easier than ever for businesses to manage their payroll, but it’s still important to make sure you’re taking advantage of all the benefits your software has to offer. Here are a few tips for making the most of your new modern payroll system in 2022:
Automate as much as possible
Payroll software is designed to automate many of the tasks associated with payroll, such as calculating taxes and deductions, so be sure to take advantage of these features. Automating these processes will help ensure accuracy and consistency, which can save you time and hassle in the long run.
Use the reporting features
The reporting features of payroll software can be extremely valuable, providing you with insights into your business’ finances and helping you to identify areas for improvement. Make sure you are taking advantage of these features and exploring all the different options they offer.
Integrate with your accounting software
Many payroll software programs offer integration with popular accounting software packages. This can be a valuable feature, allowing you to easily track your business’ financials and make sure everything is in sync. Be sure to investigate the integration options available to you and see if there is a package that would be a good fit for your business.
Train your employees
One of the benefits of such software is that it can help to automate many of the tasks associated with payroll, including tax calculations and deductions. However, this only works if your employees are familiar with how to use the software. Make sure you provide adequate training for your employees so they can make the most of the software’s features.
Stay up to date with changes
The laws and regulations governing payroll can change from year to year, so it’s important to stay up to date with any changes that may affect your business. Your software should offer updates or alerts to let you know about any changes that may impact you, so be sure to take advantage of these features.
Payroll Software: Final thoughts
If your payroll system is currently dysfunctional, don’t fret — it’s never too late to switch to a better system. In 2022, the best payroll software is likely to be more user-friendly and efficient than ever before. By investing in a top-quality system now, you can ensure that your business runs smoothly and efficiently all year long!