One of the basic tenets of operating a business is to ensure employees receive paychecks accurately and on time. Failure to do so leaves management and owners vulnerable to high employee turnover, low morale, and increased likelihood of fraud. Although instances of suboptimal cash flow can contribute to difficulty in meeting payroll obligations, a poorly designed or insufficient payroll system is much more likely to cause such a problem.
In the days of physical time cards and punch clocks, errors in payroll accounting were normally due to employees’ failure to properly record time worked, the accountant’s calculation of pay and benefits, or other clerical missteps. With the advent of payroll software for accountants, however, the errors associated with relying on manual calculations have largely been eradicated.
Selection of a payroll accounting software solution begins with consideration of a business’ unique needs. Such factors include number and relative location of employees, industry standards related to pay rates and benefits provided, and reporting requirements. Government contractors, for instance, are required to submit periodic reports as evidence of adherence to required levels of pay and benefits, based on employee title and experience. A bare bones payroll software service will be sufficient for paying employees timely but may be sorely lacking when the time comes for report submission. The worst-case scenario is being unable to file required reports, including taxes, which can lead to costly fines and loss of revenue.
Well-designed payroll software systems offer features to simplify the employee onboarding process, including obtaining tax and benefit information. Employees are normally provided with their own login profiles, allowing personal information to be entered and updated as necessary without any additional work on the accountant’s part. Also eliminated are the piles of paperwork normally associated with such changes.
Before deciding upon a software solution, it is wise to request a demo from the software developer. A demo will not only allow prospective users to briefly evaluate the interface and features but will also provide the opportunity to ascertain the level of customer service to be expected in the future. If the software or communication from the developer is found to be lacking during the demo, it is a clear warning of possible problems during actual use.
The final step in setting up a new payroll software service is the transition from the previous service, whether from a competing software service or other method. In the case of a software-to-software transition, users should gather as much information up front regarding the timelines and ease of the transition, in addition to the level of support available during the process. The developer of the new software should be able to provide a general idea of the degree to which the transition will be delayed if certain problems should arise.
As payroll accounting software responds to the needs of the marketplace, updated features and completely new offerings are made available frequently. When deciding on the best method for paying employees, be prepared to spend some time researching, testing, and asking questions. In most cases, the time spent upfront will be rewarded with accurate and timely payroll processing in the future.