9 Must-Have Payroll Software FeaturesMay 04, 2022
Payroll software is essential to the modern day workforce. Here are the nine must have HR and payroll software features for your business.
Prior to the introduction of payroll software, payroll was a tedious, labor-intensive, and error-prone process. While payroll solutions were initially seen as a luxury, organizations worldwide now recognize payroll automation as a business necessity.
25% of employees revise their Form W-4 at least once a year. 60% of businesses experience fluctuations in payroll from one pay period to the next, and only 60% of employees are confident that their paychecks are accurate. These statistics confirm that when it comes to the importance of payroll accuracy, payroll software has become a need rather than a want for small and large businesses.
What Is Payroll Software?
Payroll management software automates and streamlines the process of paying your employees for their work. These programs calculate gross wages based on hours worked, calculate and deduct taxes and benefits premiums, and generate an ACH or direct deposit file. The vast majority of organizations with even a handful of employees utilize payroll management software.
What Are Some of the Most Important Payroll Goals and Objectives of the Payroll Process?
The most important objective of the payroll process is accurate and timely compensation for the work performed. If your organization is experiencing frequent payroll errors, the payroll process likely needs to be refined.
What Payroll System Features Should I Have?
It’s common to assume that all payroll software features are the same. In fact, many business owners choose a payroll management software based on price alone under this assumption. Unfortunately, they often discover too late that it doesn’t meet the needs of the organization and is lacking critical payroll functions.
When building the business case for payroll software and comparing solutions, take into consideration these key features of full-service payroll systems:
Time Tracking Integration
If you have hourly employees, you'll want to choose payroll software that offers a time tracking module or integrates with your time tracking software. This negates the need for manual entry, improving efficiency and accuracy overall.
Direct deposit is one of the single most important payroll software features to your employees and candidates. Employees and job-seekers expect instant, convenient access to their paychecks. It also reduces the burden on you, the employer, by eliminating the need to print and distribute paychecks.
If your industry involves reimbursable employee expenses, like travel and lodging, then software with expense management capability is the best fit. These solutions automate the expense report and payment processes, saving time and improving the timeliness of reimbursement. It also ensures records are easy to find when needed.
Fair, competitive pay is table stakes in today’s war for the best talent. Compensation management tools help with managing and allocating a compensation budget that is in line with an organization’s larger goals. This makes it easier to attract and retain workers in a cutthroat marketplace and strike the balance between rewarding your employees without compromising your organization’s bottom line. Plus, with data insight capabilities, you can easily and efficiently make the case for merit increases, one-time bonus payments, cost of living increases, and more.
Employee self-service offers two primary benefits. It gives employees access to make certain changes to their profile themselves (like their bank account number or home address), and it gives employees direct access to their vacation balances, pay stubs, and W-2 forms. The result? Your HR crew spends time working on culture and accountability rather than clerical tasks.
The ability to run payroll reports is critical—as is the ability to customize these reports. Payroll software should have out-of-the-box reports that can be set up quickly for easy insights. However, every organization is unique, so also make sure your payroll platform can build customizable reports. Customizable reports give you the ability to create bespoke datasets around your company’s most critical metrics. Ask what kind of reports you'll be able to run so you know whether you'll have access to the data you need before committing.
The best payroll systems will have built-in tax tables that are automatically updated as tax rates change, taking the guesswork out of deductions, and streamline the tax filing process. Your payroll management software should automate tax filing and the generation of W-2s.
In a landscape where no two businesses' tech stacks look the same, one constant is that no matter what size your organization is or what industry you’re in, you need payroll integrations that plug seamlessly into your unique ecosystem of existing programs, apps and partners—all while meeting the needs of your company and your workers.
Payroll integrations allow you to automate the flow of data to and from your HR and payroll platform. This way, you can leverage the systems you need without the hassle of disparate data, time-consuming management, or poor user experience. In other words, you get a one-stop shop with one login. When it comes to HR and payroll software features, the ability to easily integrate new technology into your current platforms is a must.
Managing garnishments can be complex, and when it comes to wage garnishment orders, compliance is imperative. Choose a payroll software that includes garnishment management for the most accurate and efficient process.
Read More: What is Wage Garnishment? And How Does it Work?
The Benefits of a Payroll System
A payroll system is designed to achieve several key goals:
- Streamlining the payroll process for greater efficiency, which results in cost savings (less hours invested to achieve the same outcome).
- Improved accuracy and timeliness of paychecks. In fact, payroll mistakes are twice as likely in organizations that don't use a third-party solution.
- Simplified compliance with DOL standards, current and changing tax rates, and records retention laws.
- Better accessibility to important data presented in a meaningful and customizable way, driving more informed decisions.
- Support for business growth. Scaling requires automation and artificial intelligence.
Any organization with employees and/or independent contractors can benefit from full-service payroll software. Even a small business with one employee will likely find manual payroll to be inefficient and error-prone. However, it's important to note that most payroll vendors design their solution for clients that meet certain size criteria. For example, a piece of software designed for small business payroll might not be as cost-effective for large organizations with at least 1,000 or 10,000 employees.
How to Streamline and Automate Payroll
To automate your payroll, you’ll need a payroll system that provides the following key features to reduce errors and streamline processes:
- All essential payroll functions in one easy to use suite
- Automated workflows for faster and easier approval processes
- Self-service capabilities for employees to easily access and update their data
- Compliance dashboard baked into the platform
- Simple and customizable reporting solutions to make informed business decisions
Your time is precious, and the last thing you want to do is spend time digging for information—or chasing employees down for theirs.
The beauty of automated payroll management software is that it makes it easy for you (and your employees) to access the information you need quickly and offers a number of time-saving benefits:
- Reduced processing time
- Improved accuracy and compliance
- Accurate, on-time payments
- Data consistency
- Easier tax compliance
- Better data security
Streamlining and automating payroll functions is one of the safest and most effective ways to save time and money, ensure your business is protected and enhance the employee experience around HR and payroll functions.
How to Choose a Payroll Provider
When it comes to selection and implementation of a payroll solution, practice makes perfect. These tips can help you avoid common mistakes and make the right selection the first time.
- Engage shareholders early. Ask those involved in the process which payroll software features are important to them and invite them to demo different options prior to making a decision.
- Explore the support available once you implement the software. Will you have access to a tech support line? What’s the average ticket response time?
- Check out online reviews before making a commitment. Are their clients generally satisfied? Do they have a high BBB rating?
- Discuss any quirks unique to your business with the account manager to ensure the system can accommodate them. For example, do you have variable deductions like cafeteria charges? A per-piece compensation structure? Complex shift differentials? Those are important things to know in advance.
- Appoint a superuser and provide them with additional time to become proficient so they can serve as an expert and trainer for others within the organization.
Sometimes, businesses already have an HR and payroll solution in place but need to switch vendors to grow and succeed. If you find yourself in this position, fear not. Countless organizations have successfully shifted to new vendors, and you can too, by following our tips for switching payroll companies that make the transition easier and more efficient.
Why Choose Paylocity's Payroll Software?
As you look for the right payroll processing solution for your business, you'll find that there is no shortage of options to consider. At Paylocity, we urge business owners and decision-makers to go back to their list of critical features. Compare each potential solution to that list before making a final decision.
Paylocity's HR and payroll software features check all the boxes:
- Time Tracking
- Direct deposit
- Expense management
- Compensation management
- Employee self-service
- Payroll reporting
- Tax filing
- Payroll integrations
- Wage Garnishment
To learn more or get started today, request a payroll software demo online today.
Payroll doesn’t have to be complicated. Ensure compliance and accurate employee data with automated payroll software.Get Payroll Software
- Data Insights
- Employee Management
- Human Resources
- Benefits Administration
- Talent Management