Studies show that the vast majority of employers use payroll software, which saves time by automating manual processes and decreasing administrative labor. The software calculates gross-to-net wages and enables direct deposit payments. However, there’s more to payroll than paying wages.
To meet your other payroll needs, the software must have five important attributes: integration, self-service, tax administration, scalability and data security.
1. Integrative capabilities
A stand-alone payroll software solution is restricted to payroll. It does not integrate with related payroll processes such as timekeeping, human resources and employee benefits. Because the system stands alone, it increases administrative labor, the risk of errors and the potential for noncompliance.
An integrated system does the opposite. For example, an integrated timekeeping and payroll solution automatically transfers employees’ time sheets to the payroll software. This eliminates the need for additional data entry and helps ensure accurate payment for employees’ work time.
There’s also the option of a single, unified platform that combines all interrelated processes: scheduling, timekeeping, payroll, HR and benefits. Some solutions integrate with third-party apps as well, which lets them cover functions such as applicant tracking, accounting, financial wellness, engagement and productivity.
2. Employee self-service
Make sure your payroll solution offers self-service, allowing employees to access and manage their payroll and benefits information online 24/7. For example, employees can retrieve pay stubs and Form W-2s and make changes to their direct deposit, personal information and benefits elections through the self-service portal whenever they want.
Self-service gets information to employees faster and frees up time for your payroll and HR teams. It is a must-have for employees. According to the 2020 “Getting Paid in America” survey, approximately 84% of employees have access to a self-service portal that lets them access their pay and benefits online.
3. Payroll tax administration
Payroll tax administration is a complex area of payroll management. For starters, you must withhold federal and applicable state and local payroll taxes from your employees’ wages. You must also pay your own share of payroll taxes. Moreover, you must report your payroll tax liabilities, using payroll tax filings, to the relevant revenue agencies.
Your payroll software should simplify payroll tax administration by enabling automated calculations, remittances and filings.
Your operational needs may change over time and your payroll solution should be able to meet those demands. Whether you’re expanding your workforce, increasing your benefit offerings or downsizing your business due to an economic slowdown, you want payroll software that can scale up and down. If your business goes global, you’ll need a solution that facilitates global payroll management.
5. Data security
The payroll department stores sensitive and confidential information, including Social Security numbers, home addresses, bank account numbers and tax documents. Therefore, your payroll solution needs a rock-solid infrastructure to guard against data breaches and threats.
Payroll software is irresistible to cybercriminals, so be sure to keep your solution on the defensive.
Work with payroll professionals to make sure your system is aligned with your needs.
If you would like to discuss your payroll needs, please click here to contact a BlueStone representative.