Payroll: you hire employees for a certain wage, and you pay them accordingly. Seems pretty straightforward, right? With modern payroll software like Quickbooks Payroll, it is simple. But, if you choose to manually operate your payroll process without payroll software, it can quickly become your worst nightmare as a small business owner.
Payroll is more than paying your employees their due wage. It requires massive attention to detail for record-keeping, legal compliance, and administrative purposes. Without an automated system to pay such attention, errors will inevitably occur.
Payroll Software Returns Your Focus to the Business
You need to take many factors into account when paying your employees.
Sure, you have your employees’ base wages, but are your employees salaried or hourly? What deductions have your employees selected (e.g. insurance, 401k, flex spending)? Have the employees taken any vacation in the pay period at hand? How long is that pay period and why? What about sick days? If your employees were at work, did they track their time correctly? Will you cut your employees physical checks, or have you elected direct deposit? For direct deposit, do you have the correct bank information? What about the government’s portion of each paycheck? Did you calculate social security and withholding correctly? Have your employees claimed any dependents?
The list of elements affecting a single paycheck seems to go on forever. The common thread among these seemingly disparate elements is the need for tracking.
Tracking each and every detail of a paycheck is crucial, and as the business owner, this responsibility falls to you. Given the time and detail required in this process, having an automated tracking system is absolutely essential. Quickbooks provides a single payroll platform that can automate every element of the process, letting you focus your attention back to growing your business.
Ensure You’re in Compliance with Payroll Software
Automated tracking is crucial to getting your employees paid the right amounts, at the right time. But tracking and automation within your payroll operation goes beyond paying employees, it also helps you address the many compliance traps that exist within any payroll scheme.
Do the acronyms IRS, DOL, DOR, or DOI mean anything to you? They’re not new texting shorthands – all four are government agencies, and all four have compliance requirements that affect your payroll. Unfortunately, they also represent just a few of the government entities that have an interest in your payroll system.
The IRS (Internal Revenue Service) is the most obvious government agency with rules that affect your payroll. The IRS has a keen interest in your compliance with the many taxes associated with your payroll (e.g. Social Security, Medicare, withholding, etc.).
While the IRS is interested in taxes, the DOL (Department of Labor) is interested in your employees. Are they classified correctly (e.g., exempt or non-exempt)? If they are classified correctly, are you recording their time correctly? If you are recording their time correctly, are you paying them overtime correctly?
The DOR (Department of Revenue) and the DOI (Department of Insurance) present a different wrinkle to your payroll compliance because they’re state departments. From state to state, the requirements change (heck, the name of the department might even change).
Bottom line, there are a ton of moving pieces in the payroll game, and you’re expected to comply with the many facets of payroll requirements from day one. The government doesn’t typically care if you can afford to hire a payroll department, they simply require that you comply. To accurately comply with government regulations without breaking the bank, payroll software is essential.
Reporting Is Easier With Payroll Software
At this point, you should be pretty convinced that an automated payroll system is well worth it, but if the downsides of manual payroll don’t persuade you to adopt payroll software, perhaps its business value will.
An immensely valuable aspect of payroll software is its reporting capabilities. Quickbooks Payroll reports include a seemingly endless combination of payroll-based reports (e.g., payroll summary, payroll item detail, payroll expense, payroll liabilities, etc.).
These reports can quickly show you where you are overpaying, what gaps exist in your payroll operation and your tax exposure, and just about anything else that you may need to know – all with the click of a button.
With these reports readily available, you can make tweaks and adjustments to bring your system into compliance, improve your bottom line, or identify where to incentivize employees.
Another great resource to check out for reports is the Quickbooks community. There, you’ll find real Quickbooks users who have similar questions, and Quickbooks whizzes are eager to share effective payroll tips and tricks that have benefited their businesses.
The Value’s in the Details
In the modern era of entrepreneurship, where lean principles encourage small business owners to start now and address compliance issues later, payroll is a tempting element to forgo. However, with the low cost of payroll software, and the low touch required to effectively implement payroll software, including payroll software early in your operation is a no-brainer best practice.
From the compliance disasters it can help you avoid, to the streamlined tracking and readily available reports it provides, payroll software provides measurable value that your business can immediately benefit from.