Maximizing ROI: Getting the Most Out of Small Business Payroll Software
Small business payroll software makes it easy to streamline manual processes like data entry and tracking employee hours. It also helps reduce labor costs and errors. Look for a solution that’s designed for your business size. Also, find one that offers customizable reports and analytics for informed decision-making. It can help you minimize costs and maximize ROI.
Focus on High-Cost Areas
Running payroll is not a cheap endeavor, and it takes up much time for small business owners. Understanding the actual costs involved is essential to calculate your ROI accurately. Start by calculating how many hours you spend processing and filing payroll documents. Then convert those hours into real money to see how much your new payroll software could save you over time. Small business payroll software is often less costly than a third-party service, as you pay a one-time license fee rather than monthly usage and tool customization fees. However, other upfront fees like hardware and implementation may be included in your budget. Finally, make sure to consider the ongoing maintenance of your system.
The best small business payroll software also reduces compliance risks by ensuring that you have all the necessary documentation in case of an IRS audit. In addition, some vendors offer tips on tax law changes and help you stay up to date so you can avoid costly fines or penalties.
Delegate the Process
Many small businesses need help to hire full-time accounting or human resources staff. In these cases, using a powerful payroll software solution saves business owners money while reducing the time spent managing payroll and other HR and accounting processes.
Calculating and paying different taxes can be complex, especially when combining state and local tax rates with federal tax deductions and filing requirements. By automating these processes and guaranteeing compliance with all tax regulations, a dependable small business payroll system can lower the chance of errors.
Another way to maximize ROI on a small business payroll software investment is by implementing systems that allow you to delegate a specific task and measure its progress over time. It can be accomplished by establishing clear, short-term goals for each department and employee to work toward together. These goals should be SMART, specific, measurable, attainable, relevant, and timely. In addition, opening up lines of communication with each department and employee can make delegation more effective. By inviting feedback, employees can improve their performance and learn from any mistakes made in the past.
Payroll software is a costly undertaking. In addition to the initial investment, you’ll likely have to hire team members to help set up and use the system. These costs dig into payroll, so factoring them into your ROI calculations is essential. Once the system is up and running, you can expect it to save you a lot of money by automating expenses. For example, if your HR team spends an hour per employee writing midyear and year-end evaluations by hand, that’s an extra five hours your employees could have spent on revenue-generating tasks.
In addition, many vendors provide automated tax filing, which helps you avoid costly fines and penalties for late or inaccurate submissions. Some systems even notify you of changes in tax law to keep your business compliant. You can also take advantage of other features, such as self-service capabilities that allow employees to log in and check their pay stubs or update contact information anytime – without disturbing your HR department. It is one of the most significant ways a small business payroll tool can earn its keep.
Automate Time Tracking
If your business pays employees by the hour, automating time tracking helps you avoid costly errors. The system automatically records and reports employee time, which is compiled into a payroll report sent to HR or payroll services. The result is accurate paychecks and compliance with labor laws and regulations. It also helps managers monitor budgets by providing real-time information on how much they spend per project. It enables them to stay within an allocated budget and manage projects more efficiently.
Look for a user-friendly system that is easy for all employees, including those with limited computer or technical skills. Ensure employees know what to do if they encounter problems and who to contact for help when using the system. Also, consider whether or not the system is mobile-friendly. It is essential, especially during the COVID-19 pandemic, when many employees telecommute. Mobile-friendly systems allow staffers to clock in, view payslips, and update their information on any device. It increases efficiency and eliminates time-consuming, error-prone manual processes.
Track Employee Performance
Using your payroll system to track employee performance can boost ROI by motivating employees to work smarter and more complexly. Productivity can suffer from a high absenteeism rate, but you can motivate your team to work more by rewarding top performers. It will also inspire the rest of the team to follow suit. When calculating your ROI, factor in small business payroll software’s upfront and monthly costs. You may also need to pay staffers to set up the software, complete implementation tasks, and overcome a learning curve.
Most payroll systems allow you to customize reports, so consider which HR add-ons are most important for your small business. Depending on your needs, consider options like time tracking, the ability to offer benefits, and reporting capabilities. You should also find out how mobile-friendly your payroll system is. Many systems include apps that let employees clock in, view payslips, and update their info from anywhere. It is beneficial during the COVID-19 pandemic when many staffers are telecommuting.