Payroll Software

You've decided to do your own payroll, or you're an accountant or payroll company doing payroll for your client, and you want to make the payroll process as simple and streamlined as possible. If that is the case, you are in the market for payroll software that will make the job easier and eliminate mistakes. Why should you use a payroll software package rather than trying to do it all by hand? Simply because a payroll software program will save you time, money, and a lot of headaches. You are smart, and you want to save time and money, so take a little time now to find the best payroll software for your business's needs that will save a lot of time later and eliminate costly mistakes. So, what are the things you should look for in the payroll software you choose? The following are things to look for when purchasing payroll software:

1. Ease of use
2. Time and money-saving methods
3. Usable with your current bookkeeping software
4. Number of employees and/or clients it will support
5. Keeps a record or history of past payroll that is used automatically
6. Ability to print tax forms
7. Offers direct deposit that is ACH/NACHA certified

All of these items can be found through a few minutes of research on the web, or by reading the back of the payroll software box. So why are these things important? Let's take a closer look at each of these areas and why they are important when shopping for payroll software, so you can decide more easily what payroll software would be best for you and your business.

The first and most important thing you should look for when purchasing payroll software is ease of use. No one wants to buy a product then spend hours upon hours learning how to use it. That is simply a waste of your time and your money. When you look at payroll software, find out how much time people are actually spending to learn how to use it. Some payroll software sellers claim it only takes an hour to set everything up and start using the software, while others require more time. Read reviews of the software and ask others in your industry their opinion. See if the software has won any awards and what those awards were given for. Does the payroll software you are looking at come with tutorials, wizards, a user manual, or live or email support for your questions? If the payroll software seller offers a free trial version before you buy, download the trial version and see if it's intuitive or if you get lost looking at it. If you find it simple to use, then you will actually use it rather than purchasing something expensive and going back to your old methods because they are easier. If your payroll software is simple to learn and easy to use, then you save yourself time, money, and in the long run, a lot of mistakes.

The second thing to look for when you purchase payroll software is time and money-saving methods. If employees are paid hourly, does the payroll software come with a time collection method, or do you have to enter the times manually? Many payroll software providers offer an online or network time-clock that employees punch into and out of that feeds directly into your payroll software database so you don't have to do the manual work of collecting time cards and entering times into the payroll software to determine what your employees are going to be paid. Take the work out of it and find one that offers a time collection method.

Several other time and money saving questions should be answered before you purchase. Can you print checks directly from the payroll software or do you need to export the information to a different software program that you have to purchase in addition to the payroll software? Does the payroll software automatically deduct the different tax and retirement withholdings or do you have to do it manually? Can you take those deductions in percentages and dollar amounts or just one way or the other? Do you have to pay for updates to the software every six months or are the updates free as long as you use the software? Does the software track paid holidays, sick leave, and vacation pay so you don't have to? Look for time and money-saving methods in any payroll software you purchase and make sure it is easy to use.

The third thing you should look for in your payroll software is whether it works with your current bookkeeping software. Many of the different payroll software available are compatible with Quickbooks, some with Peachtree or other bookkeeping software, and a very few are compatible with Excel. Some payroll software is useable with multiple bookkeeping methods. You can normally find what bookkeeping software your payroll software is compatible with on the back of the payroll software box or listed on the company's website. It is better to be aware of what your new payroll software works with than bring it back to the business and realize that if you want to use it, you are going to have to change your bookkeeping software as well.

The fourth thing to look for when purchasing payroll software is the number of employees, or if you do payroll for more than one company, the number of clients it will support. Payroll software differs in this quite a bit. Some payroll software supports small businesses to medium businesses, while others support Fortune 500 or as many employees as your hard drive can store. Some payroll software, Payroll Relief AC for example, is specifically built for accountants and payroll companies that support more than one client (company with multiple employees). If your needs are simple, like 50 employees or less, go with a more simple software that doesn't have all the bells and whistles you'll find in big company payroll software packages. If your needs are large, like multiple departments, people on hourly, salary, contract and commission, etc., look for a payroll software package that will support all of your employees and methods of payment.

In addition to number of employees the payroll software will support, find out if it will support different payroll periods such as daily, weekly, bi-weekly, semi-monthly, monthly, quarterly, and annually. You may use one method now and decide to change in the future, so be sure it will support all the payroll periods, as most payroll software packages do.

The fifth thing to look for in when purchasing your payroll software is whether it keeps a history or record of your past payroll, and uses it automatically to fill out tax forms. If it doesn't, do not purchase it, because when tax time rolls around, you are saving yourself 12+ hours of work if the history is already there, ready to use rather than you having to gather, compile and compute the numbers yourself. Save yourself a lot of work and virtually eliminate tax mistakes by looking for payroll software that keeps your history for you and automatically finds the information you need for the forms at tax time. This leads to the next thing to look for.

The sixth thing to look for in your payroll software is whether or not it will print the tax forms you have to mail to the government and the W-2 or 1099 forms you have to mail to your employees at tax time. Who wants to go to all the work of sending all the information those forms need to another program so you can fill them out and print them? If it doesn't print your forms, it doesn't ease your payroll process. There are all sorts of forms that can differ from state to state, and from employee to employee, so it is important to see whether the payroll software you are considering will print the forms your specific business needs. Some payroll software will support every state and take the work out of figuring out which forms you need to fill out when you put in the information about your business to begin with at set-up. Eliminate the hassle of figuring out which forms you need and filling them out manually by purchasing a payroll software package that will do it for you.

The last thing to look for in your payroll software is whether it offers direct deposit with ACH/NACHA compliance. Direct deposit is one of those time-saving methods that turns your payroll from time-consuming to easy. The problem with direct deposit though, is that you have to be compliant with the ACH/NACHA when you give it to your bank. Some payroll software will transfer the check information to your employees' banks in compliant files, while other payroll software won't, which makes you send the payroll information to a third party ACH processor before it gets sent to the bank. Save yourself a step and make sure your new payroll software offers direct deposit with ACH/NACHA compliant file transfer.