Nowadays there is no excuse for not paying employees exactly what they are owed on time. There was a time when payroll was one of the most complicated and time-consuming duties for Human Resources. Thanks to the miracle of technology, what once took hours can now be completed with a few clicks.
Payroll is no joke and should be taken seriously. It’s shocking to realize that 33% of employers (smaller businesses in particular) have made and continue to make payroll errors. This issue is compounded by the fact that 49% of workers report starting a new job search after experiencing two paycheck errors - avoidable turnover like this results in billions of dollars of lost productivity every year.
Poor payroll management can result in:
With so much at stake, it’s no wonder the majority of businesses now turn to payroll software and services to automate the process for them. Cost-effective and advanced options are available for everyone from individual freelancers to Fortune100 companies. With the seamless integration of 401ks, medical, expenses, and other benefits, the cost of investment can pale in comparison to the man-hours and headaches saved.
A payroll service/software can either assist or completely take over the payroll process for a business. Everything from base salaries and taxes to complex benefits can be automated, regardless of the number of employees.
The most obvious advantage of heading down this route is the number of billable man-hours they can save. They also remove the considerable potential for human error, an issue that affects large and small businesses alike. In fact, businesses with under 20 employees lose an average of $900/year to payroll errors.
Payroll software/services also keep all necessary data in a single secure place. Under the Fair Labor Standard Act, it is a requirement for employers to keep all payroll records for at least three years. Compliance is easier with a purpose-built system rather than a mash-up of computer and paper-based accounting.
These are the key advantages, now what do I look for when choosing the best payroll option? Here are some major factors to consider:
No two payroll solutions are alike, so it's up to you to determine which one is right for your business. Fortunately, our team will make your buying process easy by compiling 10 of the best vendors in the industry. Before any of these vendors made it into our Top 10 list, we tested each provider according to the following criteria/factors:
This is a very good question given the amount of highly sensitive information you are likely to store using payroll software. Payroll software offers an extremely high level of security and encryption. However, it is also important to note that the payroll department in general is a lucrative target for hackers and scammers. The best practice, in general, is to instill a highly security-minded culture within the workplace. That means regular up-to-date training, compliance reviews, and secure passwords. Also, make sure your software is updated as soon as an update is available as these can often add additional security protocols.
Pricing structures are typically divided into two monthly fees: a base price and an additional cost per employee. A number of base fees vary from $5-$50/month while the cost per employee is largely within the single digits. Remember, this cost pales in comparison to the price of paying someone in-house to complete payroll manually.
Payroll assistance can benefit everyone from the largest and most complex companies to a business with a single employee. The cost of messing up a single paycheck can result in seriously hefty fines for anyone. Even if you are an independent contractor or freelancer a simple payroll service/software can help you organize your invoices and file your taxes with ease.
Simply put, payroll software requires you to do some inputting yourself while a payroll service is a separate company that will do everything for you. Payroll software is typically more cost-effective and gives you greater control over the process. A payroll service will take control of the entire process, saving you more time but this usually comes with a higher price tag too.