Behind every successful business is a talented team of individuals working together to accomplish the business mission. Supporting a staff, big or small, adds layers of complexity to a business—but running payroll shouldn’t be one of them. If your payroll process is stuck in a spreadsheet or spread across multiple systems, it’s time for a streamlined solution.
A payroll app can help you every step of the way, from the job posting and creating an offer letter to hiring, onboarding, and managing many aspects of the employee experience and HR functionality. Best of all, it’ll help you stay in compliance with payroll tax and other requirements.
The following are the top 4 benefits of using a modern, secure app to manage payroll.
1. Simplified onboarding
Whether you’re hiring your first employee or bringing on new talent during times of growth, the onboarding process can be time-consuming. If you don’t get it right, important information falls through the cracks. When onboarding employees or contractors, one of the most important pieces of information to collect will be Form W-9 (for contractors) or W-4 (for employees). Collecting this information during the onboarding process will ensure you are prepared to complete and file 1099s and W-2s in January. A cloud-based payroll app, such as Gusto or ADP, helps you collect all vital information and forms from the start.
Contract workers and employees will also experience a seamless onboarding process, with access to review and complete necessary documents from anywhere, regardless of location. By providing a cloud-based payroll system, you’re set up to acquire remote workers and remove geographic boundaries on the talent pool.
2. Timekeeping tools
Another big payroll pain point: employees fall behind on timesheets, and you have to track them down in order to run payroll. We recommend that our clients use a time tracking software that’s integrated with the payroll system. Most importantly, that time tracking software needs to be easy for employees to use—or they won’t use it.
Whether you’re paying people hourly or on salary, there are many reasons to ask employees to track their time. Many payroll applications include the ability to track time by project or location. Business owners can quickly and efficiently see all employees’ hours associated with each project or task, enabling insights into workforce costs and workload trends. You can confidently make business decisions and future plans when you know they’re based on actual costs.
Using a payroll app with an integrated time tracker helps to streamline your tech stack. If your workers’ hours are teetering on overtime, you can set a notification to notify the manager or even the employee. There is no need for manual double entry when time tracking and payroll are integrated. With the right review gates in place, you’ll save loads of time managing the process each payroll period.
QUICK TIP: As you think about time tracking, it can be tempting to ask your employees to track every little detail. However, the more information you ask people to submit, the more onerous you make the process—and the more likely people are to fall behind or not track their time at all. Think through what you’re going to do with the data you’re collecting. What is the minimum information you need to run payroll and, for service-based companies, bill your clients?
3. Employee benefits
To build a great team, you must provide a great place to work. Attracting and retaining top talent is about much more than offering a competitive wage. However, accessing available benefits can be quite the process for employees and frequently requires the business owner to make calculations to determine available paid time off (PTO) and other benefits.
Within many payroll applications, you can implement a PTO policy and track requests for scheduled time off. You can also add your business paid-holiday schedule. Your employees will appreciate the ability to view their hours, holidays, and vacation time balances all in one place.
Some payroll apps even offer options for health benefits. Gusto offers benefits options making the adoption process seamless.
4. Automated payroll taxes
There are many things you can and should DIY. Payroll isn’t one of them. When we say manual payroll, it’s really a shorthand expression for not using an industry-standard payroll processing software tool or outsourced payroll service. Many small businesses with only a handful of employees think they’re saving time and money by writing out paychecks, calculating withholdings, and keeping records for tax time. Unfortunately, time and money are exactly what these businesses risk losing, in big ways. Employers have a great many responsibilities on top of making sure people get paid the right amount of money on time. It’s critical to choose a payroll app that keeps you on top of every last rule, regulation, and requirement, while also saving you from endless data entry.
Gone are the days of manual payroll, tax calculations, and setting reminders to submit payments or write paper checks. If payroll is a tedious, time-consuming process, you’re doing it wrong! As an example, Gusto users spend an average of 13 minutes to run payroll. Imagine what you could do with all of your extra time! Additionally, Gusto calculates and files payroll taxes directly with the government, ensuring you don’t miss a payment or make a costly error.
What to look for in a payroll app
Automatic filing of payroll taxes with every payroll
Once those tax dollars are withheld from an employee’s paycheck, they shouldn’t appear as available cash on your books. We’ve seen companies delay their payroll taxes as a way to provide temporary relief to cash flow struggles, and it hasn’t once worked out well in the end. The penalties and interest charged for failure to remit payroll taxes on time end up costing far more than other cash flow management strategies. Using an app for payroll that automatically pulls the taxes out of your account with every payroll will lead you to better cash management in the long run, even if it seems complicated at first.
Integrated management of everything that affects paychecks
There’s no reason you need to have a bunch of different systems to manage all the various details associated with payroll. Look for a tool that includes integrations for:
- Time tracking
- Retirement accounts
- Health insurance premiums
- Workers’ compensation
- Paid time off
If your business has specialized needs, seek a flexible tool that can adapt to serve those needs.
Compliance with all federal and state documentation requirements
Most business owners know they need to collect and keep forms like W-2s, I-9s, and contractor W-9s. It’s the individual requirements of each state that tend to trip people up. Payroll apps go a long way in helping to ensure compliance with state and federal payroll regulations. Your payroll software should be up to date with the latest rules and regulations for federal and state documents, and also help you manage the process of collecting and storing all that paperwork. If you’re paying global workers, choose an app that also keeps you in compliance in their home countries.
Automatic syncing with your bookkeeping software
Double data entry is a thing of the past. Every payroll should be automatically recorded on your books, ensuring you have an up-to-the-minute picture of your cash standings.
Our payroll app of choice
The list goes on and on with the many benefits a payroll app can provide you as a business owner, as well as your employees. So, which app do you choose?
Gusto is our payroll app of choice for many reasons, not the least of which is its seamless integration with Xero’s cloud-based bookkeeping software. In addition to all of the above features, Gusto offers an economic industry-leading platform that includes benefits management, time tracking, and stellar customer service. It’s also easy to use, always up to date, and allows for automation for salaried employees. Gusto’s features are all tailored to small businesses, so you aren’t stuck navigating through a bunch of enterprise-class features you’ll never use, making payroll easy, compliant, and (dare we say it) even fun.
We offer professional Gusto onboarding that ensures your payroll is set up correctly, integrated with Xero, and collects all required documentation. We also train you to set up new employees so you’re ready to run with every new hire.
Send us a message if you’re ready to hand off your payroll process to a cloud-based technology designed to save your business time and money.