Automating your payroll using specially-designed software can be a tremendous help, even beyond simply saving time and freeing up resources to conduct other business activities. Here are some of the reasons why your small business should invest in payroll software services.
Manual Payroll Takes Time
There was a survey published in 2017 by the National Small Business Association, that suggested a third of small businesses spend over 80 hours each year preparing their federal taxes. This includes spending time on payroll taxes, as well. This is a clear indication that time and money could be better spent in more productive ways.
Manual Payroll Leaves Room For Error
When you prepare payroll manually, you are going to find that parts of the process can be complicated. This is especially true when vacation, overtime, bonuses, and benefits have to be appropriately calculated. You also have to factor in local, state, and federal payroll taxes, which have to be applied for every employee. The tax component of payroll is perhaps the biggest headache of doing payroll manually.
The IRS May Fine You For Errors
Although it’s not a guarantee that the IRS will come down on you for errors in your payroll, they do fine a third of all small businesses when they do make an error. You may end up paying more in penalty fees than you would have if you had used online payroll software. Avoid any IRS issues by signing up with a payroll software service.
Pay Your Employees Directly
Manually writing and printing checks to distribute to your employees can result in delayed payments. This holds true if an employee is absent and is unable to pick up their check on payday. Payroll software enables you to direct deposit employee earnings into their bank accounts. Employees will love this because they know precisely when they will get paid every time.
Track Time and Attendance
Employees will get paid for the time they work when you automate the payroll process. When the payroll software you use includes a time clock, you avoid going through the complicated process of adding up hours worked. Instead, the hours will get fed directly into the software, which will accurately calculate what an employee will be paid. There is additional data provided by these applications, like seeing who is getting to work late, not coming into work at all, or working overtime without it being necessary or approved.
Even if you have one employee, you should get payroll software. While the actual software may cost you monthly, it will be well worth it to save time, avoid mistakes, and avoid IRS penalties. Your employees will appreciate this, and you will find it beneficial not having to deal with the task every month. You will then be able to help your small business grow and focus its time and resources on what’s needed to increase the bottom line.