What Is Payroll Software?

What is Payroll Software?

The world has come a long way from spreadsheets and manual calculations when it comes to running payroll, all thanks to modern payroll software. 

Payroll software is most commonly a cloud-based solution that allows managers, business owners, and payroll professionals to manage and maintain payroll. Payroll software will often include a variety of automated functions, including automated payments to employees. Learn more about basic payroll terminology and components here. 

When part of a single, robust solution, payroll software can help organizations of all sizes maintain compliance with tax laws and other financial regulations, all while controlling and reducing labor costs.

Why Accurate Payroll Processing Is Crucial 

Accurate payroll processing is crucial in order to run a successful business. Inaccurate payroll processing can land employers in a heap of problems. 

For instance, any willful violations of the Fair Labor Standard Act (FLSA) minimum wage and / or overtime requirements can incur a maximum monetary penalty of $2,451 per violation. 

But that's just a start, inaccurate payroll not only lands employers with fines and penalties, but it also presents additional tasks and time-consuming processes to fix any mistakes that were made, not to mention the rift you may cause among your workforce by short-paying an employee. 

Advantages of Payroll Software

The benefits of payroll software can include, but are not limited to the following: 

• Have a scalable, paperless system that is always up-to-date
• Reduce payroll processing time
• Minimize compliance risk, and help ensure each paycheck is accurate with real-time data and reporting available from anywhere 24 / 7
• Reduce errors throughout the payroll process based on your requirements
• Get the information and insight you need — when and how you need it with real-time reports
• Process payroll with more accuracy with employee withholdings with regular tax table updates
• Keep your confidential information safe with off-site data storage that protects your information from possible disasters or theft

Payroll System Requirements

A cloud-based payroll system expands your payroll toolbox and lightens your workload. It's crucial to ensure you take into account all of your unique business needs and ensure the payroll system you are evaluating can meet those requirements. 

Payroll Software Functions Every Solution Must Have

Payroll software should allow you to streamline all of your payroll processing from start to finish and should include the following features:

• Extensive Reporting - intuitive and highly configurable standard and ad-hoc reporting
• Year-End GL Processing - to make your general ledger easier to manage
• Employee Self-Service - allow access to payroll pay stubs and earning histories, through an easy-to-use mobile app and website, from any device
• Single-Solution Capability - the best payroll software includes time and labor, benefits administration, tax deductions, and more
• Perfect Paycheck Analysis - provide an at-a-glance summary of your total payroll liability, a comparison of this week’s total payroll to the previous week’s, and a rolling 12-month view trending total labor and expense changes

Matching Payroll Software With Other Workforce Management Solutions

Included in payroll processing are many other business functions that depend on constant employee data.

With a cloud-based payroll system, you can streamline your onboarding, benefits, timekeeping, and more. By centralizing your payroll system and keeping important employee data all in one place, you can gain better insights into your business, reduce redundant and manual data entry, and finally give your business an opportunity to grow.

Payroll Tools - What Features Should Payroll Software Have?