Your company’s payroll system plays an important role in keeping your staff, finances, and accounting records organized and up-to-date. The old-fashioned way of doing things involved the manual data entry of employee data into payroll processing software via Excel spreadsheets; it was time-consuming and prone to human error. Luckily, advances in technology mean that you no longer have to go down this route; there are many systems available to make your life easier while reducing risk and improving accuracy across the board. If you’re looking to change the manual payroll process, here are 6 reasons why you should make the switch…
1) Errors
Errors happen in all types of business. They are inevitable, especially when working with humans. However, an error in payroll can have devastating results for your business including garnishments, penalties, and loss of employees’ trust. So make sure you take care of any errors immediately! If you are using software that doesn’t have error-proofing tools, ask them what options they can provide you for troubleshooting pay problems before they become problematic. Good payroll software will allow you to set thresholds for change amounts so that if something exceeds that threshold it sends an immediate red flag back to management for review. It will also track all changes made by each user so managers know who is making certain adjustments and why they were made.
2) Time Consuming
If you’re running a business, you know how demanding it can be. There are days when everything seems to pile up all at once, and your list of things to do will stretch out for what seems like forever. It might take you several days or even weeks, but if there is one process that must be done right away every single time—and yet still gets put off—it’s payroll. Having an automated payroll solution means no more headaches when it comes time to disburse employee paychecks each month. Being able to do it all in one place makes these procedures much simpler, much quicker and much less hassle for yourself and your employees. Applying modern solutions to payroll ensures accuracy and timeliness in every payment cycle. It also helps maintain compliance with tax regulations and keeps detailed records that are easy to access when needed.
3) Costly
On average, small business owners spend 1.5-2 hours each day on payroll processing and compliance. While there’s a solid argument that you should be charging clients for those hours, doing so significantly increases your costs and eats into profits. Even if you do use a payroll company, it can still cost hundreds of dollars per month for services you may not need. If you’re currently using a manual system or just paying an external company to handle payroll processing for you, switching to an automated solution will dramatically reduce your costs without sacrificing efficiency or accuracy.
4) Unreliable
If you’re using a manual process for payroll, then your company is likely capped at 25-30 employees. If you need to hire more people, it can be costly and time-consuming. If your company grows, even more, you’ll need to onboard payroll software so that you can maintain compliance with federal and state laws. Using payroll software will enable companies of all sizes across all industries to focus on what they do best while avoiding payroll headaches down the road!
5) Restricted Growth
If you’re a business with a large staff, a manual payroll process can create bottlenecks. If your current payroll system only allows five or six people to be paid in one batch, you might have trouble processing all of your payments on time. Make sure you know how long it takes to get everyone paid; if more than ten percent of your employees are currently taking longer than usual (whatever usual means), it may be time for an upgrade. It might also make sense to invest in modern payroll software having features options like direct deposit and electronic pay stubs; both cut down on human error significantly.
6) No Flexibility
If you’re using your own employees, your pay will be at odds with every other payroll you submit. If some of your employees are paid weekly and others are paid monthly, it can make things difficult for everyone involved. It’s hard enough maintaining a payroll without considering all of these different schedules! To alleviate some of that stress, use an online payroll solution to give you flexibility in when and how frequently you submit payrolls. This is ideal if any of your employees have variable hours or fluctuating schedules. It also ensures that everyone stays on track with their taxes and insurance—crucial parts of running a small business.
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