Become an insider!
Get our latest payroll and small business articles sent straight to your inbox.
In this Article:
A robust payroll software can be a lifesaver for organizations both small and large. From automating processes to minimizing errors and supporting compliance, a good payroll solution is a valuable investment for your business.
So, you’re in the process of automating your small business’ payroll or want to upgrade your existing software. Awesome! There are multiple benefits of taking on a comprehensive and flexible solution.
In this post, we cover eight must-have payroll software features to look for.
Why do small businesses need payroll software?
Payroll software automates payroll processing and management for small business owners so they can focus on being experts in their businesses, instead of payroll.
While there are many payroll providers out there, payroll software puts the power and control of payroll in your hands while simplifying all the time-consuming processes. It empowers companies to efficiently manage their employee payment processes, including tax and benefit administration, while fostering compliance. Good payroll software also integrates with accounting software to streamline and increase the efficiency of human resource processes.
Below are the key benefits of payroll software:
- Automates routine tasks: Payroll software automates repetitive tasks such as wage management, calculating pay, maintaining records and generating payroll reports, which can be monotonous and boring.
- Saves time: Automating the payroll process frees up your time to focus on growing your business (or whatever else strikes your fancy!).
- Saves money: Using software to run payroll eliminates needing to hire a giant payroll department to handle all the manual tasks, which can be more expensive over time. Besides, automation avoids costly errors, such as with payroll taxes, synonymous with manual processing.
- Enhances efficient tracking: Automation syncs employee data, giving you access to it in one place. You can easily track hourly wages, absences, vacations, hours worked and more.
- Minimizes calculation errors: Statistics indicate that 49% of employees are likely to look for a new job after experiencing two pay cheque errors. A good software solution means entering data once and then only touching it again for updates. The option to integrate with other HR tools, such as time tracking, time-off request and accounting software, means no more trying to do calculations across platforms.
- Enhances employee engagement: A payroll software with an employee self-service portal empowers workers to manage and review their data as well as access year-end tax forms and pay stubs.
- Supports compliance: Most payroll solutions are automatically updated with the current regulations to follow tax laws, enhancing regulatory compliance.
Must-have payroll software features.
There’s no question: Payroll automation makes life easier for business owners. However, you need a comprehensive and flexible payroll system with the right features to make the most of it. Below are eight essential payroll software features to look out for.
Payroll processing, calculation and management.
When looking for a payroll solution, look for one that makes payroll simpler by automating key processes such as:
- Entering hours
- Wage and tax deduction calculations
- General payroll management
Another payroll feature to keep an eye out for is direct deposit to employee and contractor bank accounts. This eliminates the time-consuming cheque preparation process, ensuring your workers receive their pay on time.
Payroll tax remittance filing and management.
Tax remittances and compliance are also must-haves for your payroll management system.
The best payroll systems update their tax tables automatically to reflect the latest regulations and support tax remittances, year-end form processing and T4/T4A/RL-1 distribution through automatic calculations and tax form generation.
These tax filing features can save a ton of time and headaches come year-end season.
Payroll for employees and contractors.
Calculating wages for employees and contractors isn’t the same. With different regulations to follow, this impacts things like tax deductions, benefits and more. If employees and contractors make up your workforce, running payroll for both can be hectic.
A payroll management software that handles both of these types of workers takes the hassle out of calculating for your part-time and full-time employees as well as any contractors you’ve brought aboard. Plus, it helps eliminate the risk of misclassifying them, which can lead to costly fines from the Canada Revenue Agency (CRA).
In-depth payroll reporting.
Comprehensive, real-time payroll reports that help you enhance your understanding of employee and business performance are a no-brainer.
Some key details you’ll want from reports:
- Payroll costs
- Tax summaries
- Employee payment summaries
- Leave and attendance records
- Deductions (ie: Workers’ compensation, employee benefits, etc.)
Having a view of this payroll data can help with making business decisions overall and make sure you’re keeping up with best practices.
Customization and flexibility.
The shifting tides of payroll and how we manage it means customization and flexibility are in demand. It makes sense. No two businesses are exactly the same, so customization will give you the chance to make sure you’re tackling the specific needs of your business while still taking care of more standard details like federal taxes and minimum wage.
Some of the essential features in this area include letting you customize custom income and deduction types while having multiple pay rates and pay schedules.
Employee self-service portal.
Payroll software with a self-service portal empowers employees to own their personal data.
This kind of portal increases transparency and minimizes errors while saving your time. For example, they can use this easy access to review and download their pay stubs and year-end forms or update personal information and payment preferences. This is especially helpful for businesses that have a large number of employees, but is great for businesses of all sizes.
Integration with accounting software.
When your payroll software can integrate with accounting software such as QuickBooks Online and Xero, you’re left with an automated system that takes streamlining processes to the next level. This way, you can share information between applications quickly and easily for a simplified bookkeeping process.
These are just a few of the benefits of having a integration with accounting or bookkeeping software:
- Synchronized transactions
- Easy chart of account mapping
- No more manual data entry (meaning fewer data entry errors to worry about)
In addition to making the payroll and bookkeeping life easier, this is also helpful for if you ever have to go through an audit. You’ll have all your information in order so you can clearly show every detail.
Security features.
Working with payroll means working with all kinds of sensitive information, both in terms of business and employee information. Social Insurance Numbers (SINs), bank accounts, tax information — that’s just the tip of the personal details iceberg you don’t want others to get their hands on.
Because of that, having advanced security capabilities is one must-have payroll software feature you shouldn’t skip over.
Cloud-based solutions store your data safely away from potential onsite data breaches. But, having an extra layer of protection with something like two-factor authentication at login helps ensure you and your users control access to this information.
Bonus feature: Accountant or bookkeeper access.
Payroll software that gives you the chance to collaborate with an accountant or bookkeeper that offers payroll services is a great feature to consider.
Think about it: Instead of having to print out all your reports to send to your accountant or bookkeeper, they’ll have easy access to your payroll. They can review your processing or even process payroll for you. That’s the beauty of it — you two can decide how you want to work together!
Getting started with these must-have payroll software features.
Automating payroll takes a lot of pressure and workload off small businesses. The right payroll software saves time and money, enhances efficient tracking of employee data, boosts engagement, minimizes errors and supports compliance. However, choosing a comprehensive payroll solution that meets your business’s needs is key.
Wagepoint is an automated payroll software built just for small businesses to simplify payroll processing and free up their time so they can focus on growing or quite simply doing what they love. Behind Wagepoint is a team of friendly payroll professionals you can always count on for solid customer service whenever you need support or anything else!
Interested? Get started today!
