When you’re running a small business with limited staff and resources, every task feels like an uphill battle. But when it comes to something like payroll management, the struggle is that much more real.
And if there’s one thing that can feel even more stressful than usual when you have your hands full: managing payroll for your business.
Whether you’re handling things yourself or working with a bookkeeper, you might not know if you’re doing everything right or leaving any stone unturned. After all, dealing with taxes, deductions, and other specifics can be very complicated and confusing for smaller businesses. Using payroll software can make this process easier – so here are 8 reasons why you should use payroll software for small businesses as soon as possible.
1. Payroll calculations are difficult to get right.
It’s important to know that a payroll software can’t do everything on its own. It can’t, for example, collect data that your employees provide you with like their personal information – but it can and should handle the calculations that come with those numbers. Using the software’s tools, you’ll be able to easily set up calculations for payroll deductions like taxes, vacation days, and health benefits. It’s important to get these calculations right, and a software can help you avoid any costly mistakes. An inaccurate calculation could result in your employees not getting the benefit or payment that’s rightfully theirs, or you having to pay fines and penalties for breaking the law.
2. Employees expect timely payments.
Employees are often paid on a weekly or bi-weekly basis, and it’s important that you don’t miss a payment. Whether you’re using a paper calendar to keep track of due dates or a software to manage the process, you want to make sure you’re paying your employees on time. If you’re using a software, you can set it up so that your payroll payments are automatically processed and sent to employees at the right time. If you’re using a paper calendar, though, you could risk missing payments if you don’t keep track of everything and make sure you don’t miss a date. Employees who don’t receive their payments on time might be less motivated to do their jobs, which can lead to sub-par customer service and productivity. If you’re using a paper calendar, you could lose track of when payments are due each week, making it harder to stay on top of everything and risk missing payments.
3. A bad mistake could lead to fines and penalties.
If you’re using software to handle payroll, you can often program it to double-check calculations before you send them out to employees. This way, you might be able to catch a mistake before it becomes a big problem. If you’re doing calculations by hand, though, you can’t double-check anything – so you could easily miss a mistake that could get you fined or penalized. A mistake like this could lead to you having to pay fines to the government for using incorrect numbers or having to give money back to employees that they didn’t earn. And if you don’t catch the mistake early on, it could lead to financial problems for you and your business.
4. Payroll is one of your business’s biggest expenses.
If you’re not careful, payroll can be one of your biggest expenses – and a software can help you keep track of and lower this cost. Depending on how many employees you have and what kind of benefits they receive, the cost of payroll can vary. And it’s important to keep track of this cost and try to keep it under control. You can do this by using a software to track employee hours and wages and by setting up specific deductions and benefits for each employee. This way, you can see how much each employee is costing you, and you can adjust their hours and wages as needed to keep their cost down.
5. You don’t want to risk breaking the law by doing it wrong yourself.
When you’re handling payroll for your business, you don’t want to risk breaking the law or doing something incorrectly. A software can help you make sure everything is done correctly and with all the latest government laws and regulations in mind. With a software, you can set up rules and calculations that follow current laws and make sure everything is correct. For example, you can make sure that your employees’ Social Security Numbers are correct and that all tax deductions are accurate. Using a paper calendar to manage payroll could put you at risk of making a mistake that could put your company in trouble and cost employees money.
6. It can help you find tax deductions you might have missed otherwise.
A payroll software can also help you discover and take advantage of deductions that you might not otherwise have known about. For example, if you’re giving benefits like health insurance or retirement plans to your employees, they could be tax deductions that you’re missing out on. Using software, you can set up deductions for these benefits and have them be a part of each employee’s pay. This way, you can make sure to get the most out of your benefits and have the government help you pay for them.
7. It Can Help You Find Clearer Business Strategies
When you use payroll software, it can give you a clear picture of how much you’re paying in payroll, how many hours your employees are working, and more. You can even use it to create budgets for how much you’d like to spend on payroll each month. When you have this information, it can help you to find clearer business strategies. You can find out if you’re paying your employees what they’re worth, or if they’re being underpaid – which can lead to more satisfied employees who may stay with your company longer.
8. Human Error Is Common With Hand-Made Calculations
When you rely on hand-made calculations, there’s a chance that you could make a mistake. This can be a costly mistake, too, as mentioned above. And it could lead to a bad reputation amongst employees if they feel wronged or underpaid due to your mistake. And it could even lead to you having to shut down your business if the mistake is severe enough and you can’t pay employees what they’re owed.
Conclusion
There are many benefits to using payroll software for your business, whether you have one employee or 10. It’s important to keep in mind that the software can’t do everything for you, but it can make managing payroll for your company much easier. With payroll software, you can make sure that you’re following all the latest government laws and regulations, saving money by taking advantage of tax deductions, and paying employees on time. It can also help you make sure payroll is accurate and that no one is being underpaid or overpaid.