6 Benefits of Payroll Software That’ll Make You Think Twice About Your Current Solution

Running your business is riveting. But let’s be honest … some aspects of entrepreneurship are a little tedious, like managing payroll. And although it might be a little less than thrilling, handling payroll is absolutely essential.

Some small business owners choose to manage payroll by hand. Others outsource payroll to a bookkeeper or professional employer organization (PEO). One method saves you money and the other saves you time.

Why not have both?

Online payroll software is a happy medium for small business owners looking to streamline their process while also managing payroll in-house.

If you’re looking for a dependable solution to managing your small business payroll, you might consider online software.

These six benefits of online payroll software may make you think twice about your current solution.

1. Save time and money

How often do you work per week? One Gallup study found that 62% of small business owners work 50 or more hours per week.

Are you worried about business finances? In another study, 33% of small business owners cited lack of capital and cash flow as their top challenge.

If you fall into either of the above statistics, you might be searching for ways to save time and money.

With payroll software, you can simplify your employer responsibilities while also avoiding hefty fees that come with outsourcing.

Software saves you from calculating wages and taxes manually.

Instead of totaling up an hourly employee’s hours and multiplying them by their hourly wages, you can simply input them into your software. And, the software automatically calculates taxes you need to withhold, too.

If you opt for a full service payroll solution, you don’t have to worry about depositing payroll taxes with the IRS.

2. Avoid costly payroll mistakes

Payroll mistakes are expensive. Failing to withhold the right amount in employment taxes could lead to IRS penalties. And if you forget to provide overtime pay to nonexempt employees, you could face FLSA (Fair Labor Standards Act) penalties.

Using a payroll system could help you avoid tax miscalculations.

Multiplying each employee’s wages by the Social Security or Medicare tax rate by hand leaves room for simple mistakes. And when you calculate federal income taxes by hand, you might use the wrong federal income tax withholding table.

A reliable software solution provides guaranteed calculations. Just be sure to double check the numbers you input (e.g., entering 50 hours worked instead of 40).

3. Enjoy automatic tax updates

Tax laws change all the time. Sure, you can subscribe to your favorite payroll blog and monitor the latest news updates, but you could still miss a tax update.

Online payroll software systems automatically update to reflect new tax updates. And, you don’t need to track hardware and software maintenance like you would with desktop software.

New change to the Social Security wage base? No problem. Change to the federal income tax withholding tables? Your online payroll’s got this.

You won’t need to worry about under-withholding or over-withholding taxes due to tax updates if you use online payroll software.

4. Create an instant paper trail

As an employer, you must maintain payroll records.

According to the Fair Labor Standards Act, you must keep all payroll records for at least three years. And, the IRS requires that you maintain employment tax records for at least four years.

If you use software, you can easily access historical payroll information that detail things like how much you paid and deducted from employees’ paychecks. That way, you can comply with FLSA and IRS recordkeeping regulations.

5. Rest assured your information is secure

Are you worried about your payroll information security? If you manage payroll by hand, you might store payroll records in a filing cabinet or digital folder. But what happens if someone accesses your files?

Online payroll software is a secure option for managing payroll. Many cloud payroll providers use the same security system as banks to protect payroll information.

What happens if there’s a flood or power outage?

Paper payroll records can get damaged during a natural disaster. And if there’s a power outage, you might lose unsaved documents.

Online payroll software information is stored in the cloud. You won’t lose payroll history if your computer crashes. And because payroll is in the cloud, you can access it anytime and anywhere.

6. Take advantage of support

Payroll can be confusing. Most business owners aren’t experts on the ins and outs of payroll.

Not to worry—help is typically only a phone call away.

Some payroll software solutions offer free support if you have questions. You might be able to access them over the phone, online through a chat feature, or via email.

Using payroll software may require some getting used to. As with anything, there’s a slight learning curve required to manage the simplest solution. But with free support, you can feel confident that you’re not alone in the process.

Author Bio:  Rachel Blakely-Gray is a content writer at Patriot Software, LLC. Patriot Software offers online accounting and payroll software for small business owners. At Patriot, Rachel enjoys providing actionable, growth-oriented content.