Six factors to consider before choosing a payroll software

Payroll can be one of the most complex aspects of running your own business, particularly if you have multiple employees. It’s important to remember that payroll can make or break your business, so choosing the right payroll software is vital to your success and your bottom line. This checklist will help you narrow down your search for the best payroll software for small business needs.

1) Know Your Company's Needs

Before you can even think about which payroll service to use, you’ll need to know your company’s payroll needs. For example, do you have multiple employees? Are they full-time or part-time? Will you pay them at an hourly rate, on commission, or as salaried employees? All of these details will help determine what kind of software you need. If your business has multiple locations or employees who are eligible for overtime pay and/or tips, then it’s probably worth looking into a more robust software that lets you factor those things in. Whatever your company's payroll needs are, try to make sure that whatever provider you choose is able to meet them before signing any contracts—it can save headaches down the road.

2) Are Their Services Available in All 50 States?

Because payroll is handled by state law, you’ll want to make sure that your payroll software will meet every one of your states’ requirements. If not, you may end up with fines from state agencies—which, no matter how small they are now, can quickly add up. Before signing on with any service, do some research into what each company offers in terms of location availability. You should also look into whether or not your state has specific features you must legally include in your payroll process—some do require specific tax forms or reports.

3) What Is the Company Reputation?

The best way to find out about any company is to ask around and see what people are saying. Look at any online reviews, or ask employees that may have been with them for some time. You want to make sure you feel confident in your payroll provider’s ability to get you everything you need.

4) Does the Company Offer 24/7 Support?

Payroll services often have extended hours to accommodate their customers. Companies that can be reached during odd hours are best, as they allow business owners to do payroll after regular work hours or even on weekends if necessary. If you’re considering a payroll service and don’t know whether it provides 24/7 support, give them a call to find out. Try calling at 10pm on Sunday—if your call goes through, there’s no excuse not to hire them!

5) Which Technology Will Help Me Save Time?

The best way to measure payroll software is by comparing it to using paper forms and spreadsheets. According to one estimate, it would take up to three months per year of an employee’s time to complete all of their paperwork. If you don’t have someone on staff who can dedicate that amount of time, it’s important to find software that will help you automate your processes so you can get back as much time as possible. While every company has different needs, there are some general rules worth following when evaluating which technology will help you save time.

6) Is it cost-effective?

One of your main goals as an entrepreneur is likely to make money—so you’ll want to make sure you won’t be charged so much that it negatively impacts your bottom line. In addition, some payroll companies tack on charges that are unrelated to pay and file taxes, so do your research before signing up. It’s also worth noting that while fees and rates vary widely among services, certain payroll companies may not even offer an online solution if you have less than 20 employees or more than 50.

Summary

With more than 5,000 payroll providers to choose from, choosing which one is right for your business can be confusing. Here are eight considerations to keep in mind while you make your decision. It’s worth noting that if you have employees, it’s likely you’ll need additional payroll services as well (as discussed here), so don’t forget to check with those companies before making a decision.