Payroll is one of the most important parts of a business’s accounting operations. It is also one of the most complex to manage. To understand why, think about all the moving parts with managing payroll:
- Collecting data. You need to retrieve and manage forms for employees. In the United States, for instance, you need to collect a W-4. If you have employees in other parts of the world, you’ll need to manage other forms, such as the TD-1 in Canada. In addition to collecting these forms upon hiring employees, you also need to make sure that your data remains accurate. What happens if one of your employees has a baby or needs to change his or her withholdings? You need a clear process to keep track of these records.
- Withholding taxes. Business owners need to make sure that they’re paying taxes accurately, on a timely basis. Employers in the United States, for example, must pay Social Security, Medicare, unemployment, and more to various government entities. What you owe depends on where your business is based.
- Preparing reports and keeping records. Employers are responsible for managing the many moving parts of payroll. In addition to paying employees on-time and making sure that your calculations are correct for every individual on your team, you need to keep a paper trail. You need to track your taxes to make sure that your calculations are accurate. Even a simple mistake could result in back-pay and fines.
One of the biggest challenges that small businesses encounter is human error. If you’re processing payroll manually, there are many potential details that could fall through the cracks. What happens if you fall sick and you need to take time off? Laws are strict, and you have a commitment to paying your employees–and your taxes–on time.
Enter payroll software.
The benefits of payroll software
The QuickBooks team, for years, has studied the needs of small business owners around the world. Through the company’s Follow Me Home program, researchers spend one-on-one time with small business owners to study their processes and understand where human error is likely to arise. Using the findings from this research, the QuickBooks team has built automated processes that simplify the process of running payroll. Using software like QuickBooks, you can:
- Easily set up health insurance, retirement plans, deductions, and garnishments for employees.
- Keep track of employee data and changes that take place over the year.
- Give employees access, at any time of the day, to their paycheck information.
- Enable employees to track their own hours and change their withholding information.
- Make your books accessible to a payroll partner, so that you can outsource your operations, altogether.
- Set up digital processes to pay taxes and automatically deposit what you owe to relevant entities.
- Add new employees to your payroll system, without taking on additional manual work.
- Track taxes and schedule reminders for what you need to pay and to whom.
- Automatically enable direct deposits, to transfer funds into your employees’ accounts no matter where they are in the world.
- Automatically run payroll at the frequency that is necessary for your company.
The importance of reporting
Payroll is an operation with multiple moving parts. In addition to processing payroll, your software needs to have basic reporting capabilities to help you understand:
- How much you’re paying on taxes
- Whether you’re overpaying
- Whether gaps exist in your payroll process
- Your tax exposure
- Your payroll accuracy
- Time tracking
- Benefits reporting including health insurance plans and workers comp
Software also enables real-time data updates so that you have an accurate view of what’s happening in your accounting infrastructure. This capability enables a level of accountant-readiness that is otherwise not possible if you’re processing payroll manually. If you run into a problem, someone on your team can easily jump in to find a resolution.
QuickBooks provides a single payroll platform that automates every element of the process, letting you focus your attention back to growing your business. A solid accounting infrastructure is an absolute must for any company looking to evolve. The more you automate in your payroll processes, the more funds you can free up to hire teammates for your core operations.
And if an error happens with your software? With a 100% Penalty-Free Guarantee, the QuickBooks team deal with the IRS for you – and pay any penalties, too. See how easy running payroll can be by watching the videos on this page.