Payroll used to be the bane of any manager or employer's existence. Once a month (or possibly more, depending on the company’s payment structure), they'd have to sit with the painful task of calculating, checking, complying, and organizing payroll for each employee. This included time off, sick leave, vacation days, salaried, hourly, temp employees, the works. Everyone gave a huge sigh of relief when payroll services and software came onto the scene.
The obvious benefit of using a payroll service is that this time-guzzling task is taken off your shoulders and your mind. In addition to that, though, there are other benefits a savvy business owner can glean using a reliable payroll service like:
Removes human error
Thousands of dollars are lost every year to businesses just because of a misplaced period or a forgotten zero. When people are crunching numbers, errors can happen. When machines do the work, that margin of error is reduced to negligible figures or erased altogether.
Most good payroll services providers will also offer tax compliance and filing within their packages. This includes calculating, filing, reporting, and any other tax requirements needed. It also means that you’ll stay fully compliant since these services stay up to date with the ever-changing legal requirements for each state and business.
Keep employees in the loop
Payroll services keep all the important payroll data in one secure but easy to access location for all employees. So, your workers can quickly print out pay stubs, get a birds’ eye view of their annual payouts, or add information as necessary.
Other benefits include saving money with reporting and data analysis, better time efficiency, and human resource management like new-hire onboarding, vacation days calculating, and benefits management.
How to Choose the Right Service for You
While there is no telling a business which software or service will be the best fit for them, there are a few key features to look out for when doing your comparison shopping. Before signing up for any service, make sure it’s got these all-important checkboxes ticked off:
- Full payroll management: Today, you really shouldn’t have to do anything but click a button or two to get payroll underway.
- Easy payment methods: Whether you prefer direct deposit, pay cards, or business checks, make sure your payroll software has the options you want, so you can pay your employees quickly and with ease.
- Tax filing: This is one of the biggest perks of using payroll software today. Make sure the payroll service providers you’re looking at are fully tax compliant, meaning they file all your taxes, keep up to date with changes, and will send out forms and files like W-2s and 1099s for all of your employees.
- Compensation management: Taxes aren’t the only thing that need managing. Make sure your payroll services online take care of things like workers’ comp, bonuses, adjustments, and any other extras required by law.
- HR benefits management: What benefits are included in your payroll service? Will they handle health like dental or vision care? Are there added perks like fitness and mental wellness packages? The more you can give your employees, the happier and more productive they'll be.
- Employee self-serve: This isn't an essential feature, but it sure is useful. Employee self-serve means your employees can submit information for themselves. This way, you don't have to spend valuable time inputting all that data. It also means your employees can access their own information, so your workers can print their own pay stubs or check how many vacation days they have left without bothering you for this simple data search.
- Reporting: Reporting is an important feature that lets you gain valuable insight into the inner workings of your organization. From taxes and budget overviews to employee productivity evaluations, reporting is an essential form of business intelligence you don’t want to do without.
The Difference Between a Payroll Software and a Payroll Service
At first glance, payroll software doesn’t appear any different than the payroll services you are used to. Upon closer look, however, you’ll notice some important differences that could make the choice of which type of payroll you want to invest in easier. Here are a few key areas where these two options diverge:
Probably the most important aspect where payroll software and services differ is in security. Payroll services require you to send them all your employee information in order to run payroll. This includes highly sensitive data like employee identification numbers, bank information, and employee records. Of course, all of this is done through highly secure channels with the strongest levels of encryption. But the fact is that you are still sending over your extremely sensitive data.
Payroll software, on the other hand, lets you handle all of your payroll requirements without having to shift any sensitive data over to anyone else. You keep all of your information on your own servers, and only your eyes ever see these details. So, it’s a safer option to be sure.
Payroll services has an edge over payroll software on this one. While it’s laughably simple to run payroll from most of the top payroll services online today, being able to hand over all the information for someone else to click those buttons is one step easier. So, if you’re looking for total hands-free, payroll services is a better bet.
Of course, one of the biggest factors most companies will look at when comparing payroll options is the price tag. Hands down payroll software wins this battle. That’s because you simply can’t compare a software pricing structure with a service one. So, if money is an important factor, payroll software will win the war.