When you go to buy a brand-new car off the lot, you expect to have certain features included as standard. For example, you are not going purchase a car that doesn’t have both heating and air-conditioning. It’s just standard practice to include them. Well, payroll processing software works the same way. There is a list of must-have features that ought to be standard in every software package.
Below are the most important features that should come standard. Any payroll processing software that does not include them is probably not worth purchasing. This is true whether a company is purchasing software for in-house payroll or working with an online payroll service that provides software as part of its fee.
Automatic Tax Calculations
Federal and state payroll taxes are nothing to take lightly. Furthermore, one of the biggest reasons for computerizing payroll is to eliminate the mistakes that come with calculating these taxes. There is just no reason for payroll software not to have built-in, automatic tax calculation capabilities. A payroll rep should be able to enter employee information once and then expect taxes to be accurately calculated by the software with every pay period.
Support for Multiple Payroll Cycles
Employers can choose to pay their workers weekly, biweekly, semimonthly, or monthly. A good payroll processing software package offers support for all four. Why should this be standard? Because companies cannot guarantee they will follow the same payroll cycle in perpetuity. Things change. Payroll software needs to be able to accommodate those changes when they occur.
Support for Multiple Pay Types
Just like there are different pay cycles, there are different pay types that have to be accounted for. Some employees are paid based on an hourly rate while others are salaried; some may earn commission along with base pay; managers and executives might be eligible for regular bonuses. Payroll software needs to be able to account for all of these different pay types without missing a beat.
Comprehensive Reporting Capabilities
Another important reason for computerizing payroll processing is the need for accurate reports. Any payroll processing software worth investing in has comprehensive reporting capabilities built-in. Software should be able to generate journals and summaries, tax reports, employee earnings reports, payroll totals, withholding totals, and so on.
Support for Vacation and Sick Time
Companies that offer their employees vacation and sick time (and who doesn’t) need to be able to account for that time in payroll processing. As vacation and sick time is now so commonplace, it does not seem reasonable for a software developer to create a payroll package that doesn’t account for it. Still, there are probably some out there.
Employee Account Access
Employees and contractors should always have instant access to their payroll information. This is best done through an online portal that gives each employee his or her own account. Therefore, payroll processing software needs to have the capability to either support employee access directly or integrate with another system that provides it.
Support for Employee Pay Options
Lastly, support for multiple pay options should be standard for any payroll processing software. In other words, software should be able to support both paper checks and direct deposits. If a company chooses to use other means of paying workers, these need to be supported as well.
Payroll processing software takes a lot of the headaches out of payroll tasks. But it has to be good software capable of supporting the company’s needs. Whether you handle payroll in-house or contract with an online service provider, take the time to investigate software before you make any kind of purchase decision.