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How to Determine If You Need a New Payroll Software

by / ⠀Entrepreneurship Finance Startup Advice / October 24, 2022
new payroll software

When all is right with payroll, all is right with the world. However, it is a source of great stress when things go wrong. Even if you are happy with your current payroll system, chances are you are missing out on benefits that will streamline the process and reduce errors with new payroll software.

It is easy to get attached to your systems and software, making it difficult to consider change, especially for something as vital and potentially volatile as payroll. The key is to make an informed choice, whether that means sticking with what you know or getting an upgrade. There are things you can look for that tell you it is time for something new.

1. Answer the Question of Why

Why should you even consider a new payroll system? The first step is to evaluate your current software and ask yourself a few questions. For example, does your current provider charge per pay run? Are you experiencing recurring errors with federal, state, or local taxes when running payroll?

Maybe the goal is to free up time so you can focus on other aspects of your business. For instance, are you spending hours each month onboarding new hires or responding to requests for tax documents? Many small business payroll software providers offer self-service portals, so employees can easily manage these types of tasks with just a few clicks — any time of day.

With so many different companies on the market, you may just be curious to see what’s out there, and how they can save you time and money. There’s nothing wrong with exploring your options, and if you’re thinking of making a switch, there’s no shortage of top-tier software solutions at your fingertips.

2. You Are Doing It Old-School

If payroll for you consists of a spreadsheet and paper checks, it is time to move into the 21st century. You don’t worry about crunching numbers, data input, or figuring out time cards with the right payroll system.

Trying to manage your payroll manually costs you time beyond just cutting the checks. You have to deal with the accounting side of the payroll process, too.

Manual payroll also costs you in consumables. You need paper checks to print on and ink for the printer. The amount of time, effort, and money you put into it could be spent growing your business.

A payroll system will do the calculations and manage the funds for you. Payments are typically electronic, which benefits both you and your employees, whether you have two or two hundred.

Old school payroll may also impact your ability to get funding. Any small mistake in the numbers may affect the decision to give you a business loan, for example, or an interest rate.

3. You Are Not in the Cloud

Cloud solutions for payroll mean you can access the system anytime and anywhere. A cloud-based payroll system also makes it easier to manage remote employees or handle business expenses from the road.

Cloud systems ensure you keep your payroll records for as long as necessary. Even if there is a natural disaster, your payroll records are safe and accessible. You don’t worry about backing them up on a separate drive for safety in case your computer goes down, either. Everything is safely stored for you.

4. You Need New Features

The problem with sticking with a software system you know and love is it might not grow with you. As your business expands, you may have new payroll needs that the old system can’t handle. There is no reason to try to fit a square peg in a round hole. An upgraded payroll system will likely have what you need.

5. The System Is Changing

Software tends to evolve. If you struggle to keep up with your current payroll system changes, then maybe start fresh with someone new and easier to follow. Few things are more frustrating than a complicated interface. A different system may have an interface designed more to fit your needs.

6. You Are Using More Than One System

Perhaps back in the day, when you first went to an automated payroll system, you needed more than one to get all the features necessary to run your business. Upgrading to a new program may allow you to consolidate your payroll into one more comprehensive software package. That will save you both time and money.

7. You Upgraded Other Systems

If you recently upgraded other systems in your network, like human resources or finance, they may not interface with an older payroll program. It might be necessary to make a change to get your network back in sync. A centralized network is critical to keeping the numbers accurate and reducing errors.

8. Your Employees Deserve Better

Accurate and timely payroll is the core of your relationship with your employees. If that isn’t happening, it affects morale and their work environment. Investing in a new and improved payroll system is more accessible than hiring new staff. Just seeing you act on complaints will do a lot to end the friction and show your employees that you advocate for them.

It is essential that you protect your employee’s information, too. An older system may not have up-to-date security features, which will put you and your employees at risk of data theft.

Change is hard but necessary for growth. That is true in most things and definitely in the business world. So consider what you get from your old payroll system and whether it might be time for an upgrade.

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