Online payroll processing allows small businesses to store payroll information in a cloud-based system, which has eliminated the need to keep paper files and store such confidential data on a computer hard drive. Modern online payroll processing does not require the skills of a professional bookkeeper. When payday arrives, a few simple commands on the computer initiate the necessary automated bookkeeping tasks and issue direct deposits to the bank accounts of the businesses’ employees.
The Dark Ages of Payroll Processing Are Over
Before the age of computers, payroll processing was labor-intensive. It required small businesses to devote two or three employees to handle all of the necessary tasks for payroll, which involved typing paychecks with multiple carbon copies. The carbon copies would be sorted and filed in the office payroll file, the employees’ individual files, a payroll tax file and the office income tax records file. It was necessary for office personnel to compute paycheck deductions, such as income tax withholding, as well as deductions for optional benefits. A bookkeeper or accountant would manually enter payroll data into a ledger, which documented the expenses incurred by the business. With the arrival of the mainframe computer era, small businesses paid generous fees to payroll processing firms, which deployed their massive computers to automate payroll processing functions. These systems required the completion of forms in advance of each payday.
Today’s New Small Business Can Send Its Payroll to the Cloud
Consider the advantages of using a paperless payroll system to save money, time and effort at your small business. Payroll forms cost money, and paycheck processing brings additional expenses. Storage of payroll and employment files consumes expensive office space. Printing documents from your company’s computers brings additional costs for paper, toner cartridges, and having personnel handle the printing and filing of those forms. Paying your employees online with QuickBooks Online Payroll involves only three steps, which result in electronic funds transfers directly to the employees’ bank accounts. Using QuickBooks Online Mobile Accounting Software allows you to sync to the Receipt Bank app, which extracts data from invoices and receipts. You can then send that information to your QuickBooks accounting platform.
Big Savings for Small Businesses and Nonprofit Organizations
For a small monthly fee, you can administer your payroll from a desktop computer or smartphone, because data storage and processing tasks take place in the cloud. It is no longer necessary to mail or prepare paychecks. New users of systems such as QuickBooks Online Payroll can obtain free assistance from online experts when learning how to use the system. Users of QuickBooks accounting software do not need to make duplicate entries to QuickBooks Payroll. A stolen computer does not compromise confidential employee information; this data does not reside on a disk or flash drive. Many cloud-based payroll systems automatically back up data on a daily basis to prevent unavailability resulting from system outages.