COVID-19 has changed how small businesses operate, from applying for relief such as the Paycheck Protection Program (PPP) to updating payroll processes. Payroll—comprised of complex processes including garnishments and unemployment claims, payroll taxes, and classifying workers—doesn’t have to be confusing. By understanding payroll changes, payroll technology, and the ebb and flow of time and attendance, you can improve and simplify your payroll processes. WeWork Business Solutions, powered by VensureHR makes professional services simple, so you can revitalize your small business during this time.
Payroll has shifted from a purely manual process, where business owners would sit hunched over a pay log making note of each employee’s time, to cloud-based software that syncs time and attendance details. The software automatically assesses garnishments, workers’ compensation, and payroll adjustments, which simplifies payroll processing.
But some business owners are still operating halfway between the old system and the new, by using on-premises accounting software, for example, but still tracking time and attendance manually. As a result, they’re spending valuable time on tasks that could be fully automated—which, as a result, would free them up to focus on big-picture business goals.
Payroll automation allows a business to avoid delays in processing days or timelines, and provides accurate timekeeping and record-keeping and less chance of errors regarding tax calculation. Not sure whether payroll technology is right for your business? These benefits might convince you.
Benefits of automated payroll technology
Payroll tends to be one of the more complex administrative back-office tasks for a business. The person assigned to processing payroll is responsible for the accuracy of employee wages and salaries and applying appropriate tax deductions, withholdings, and employee benefit deductions such as 401(k) contributions.
Missteps in the payroll area can lead to payroll penalties enforced by the Internal Revenue Service (IRS). Payroll technology solutions can help avoid unnecessary fines or fees because they are less prone to errors. It is still essential for business owners and/or payroll personnel to manage the payroll process carefully, regardless of automated intervention, to ensure that calculations and processing accuracy and times are met.
Ensure employees are paid on time
Payroll is often handled by a small yet mighty team of professionals who manage to string together traditional solutions (like spreadsheets and general calculations) and payroll or accounting-specific software in order to complete what they need for the business. Payroll technology specifically serves your business, likely with a focus on your industry, to ensure that your employees are paid their wages on time and accurately, making tax season that much easier.
Technology integrations have taken it one step further by incorporating location tracking based on facial recognition. While this feature is not as common, it is available to businesses that value the ability to precisely track an employee’s attendance based on when they enter/exit the building.
Security and safety are among the top payroll technology concerns as businesses become more aware of cybercrimes and security breaches. On-premises software is secure as long as there are various encryption levels and password-protected access. Automating security has a built-in benefit: No hard-copy data and employee details are left lying around the office. Businesses can also easily avoid data/detail duplication or duplicate transactions, as the software has built-in protocols for this.
Understanding payroll compliance
Compliance regulations can vary by region, from country to country. It behooves any business to create and uphold payroll policies to assist in accurate calculations, withholdings, and payments in order to be fully compliant.
The internet has allowed businesses of any size or length of operation to embrace global sales and remote workers located in nearly any country. General data protection regulation (GDPR) protects the personal data of European Union (EU) residents collected by businesses. These standards also shield businesses from incurring large fines due to the inability to maintain the proper level of security. Automated payroll platforms enabled with GDPR-compliant technology will ensure your business won’t have to worry as much about data breaches putting sensitive employee information at risk—which would leave a company vulnerable to litigation.
In addition, payroll technology ensures accuracy regarding rapidly-changing legislation as it relates to both payroll and taxes. Examples include elective deferrals, highly compensated employee level changes, and adjustments to the Social Security wage base.
Essential technology components
On their own, payroll platforms help secure business operations and administration tasks. Once payroll is integrated with human resources technologies, however, the platform becomes an essential tool in every employee’s day. Employees can access information regarding their last performance evaluation, for example, in the same dashboard as their last pay stub.
The integration of payroll and HR information creates a significant efficiency in effectively managing employee data. For example, an HR representative can easily see that an employee has requested a leave of absence. This data is shared across the platform for the payroll representative to ensure there is no lapse in pay. Additionally, a single integrated tool also allows for cross-component reporting, giving deeper insight into each employee and any relevant details.
Choosing the right payroll platform
There are a few key points worth considering before signing a contract or purchasing an on-premises payroll system.
To start, make a list of the software features and functionalities that are most important to you. The best platform for your business may not necessarily be the best option for another company in the same industry. These questions should get you thinking about what’s best for you and your employees.
- What percentage of employees prefer to receive digital or direct deposit payments vs. paper checks or debit card payments? Does the provider support the majority of employees? If employees prefer direct deposit, is there a processing fee associated with it?
- If your employees receive supplemental wages, including commissions or bonuses, does the platform support these intermittent payments?
- Are employees able to enter time and attendance information on their own, or does it require an admin-level user to submit? If the employee is able to manage their own time and attendance items, does the portal allow for mobile or remote accessibility?
Checklist: Preparing for the switch to automation
An automated payroll system should minimize the work for your payroll staff, streamline processes, and keep the noise level low. The items on this checklist will help ensure time and cost savings stay top-of-mind as you choose and implement a system.
- Current pay structure
You’ll need to determine if the current pay structure for your employees should remain the same (biweekly, bimonthly, monthly, etc.), or if it will vary once your organization is fully converted to the new system.
- Level of customer support
Not all customer service representatives or processes are created equal. Your expectations for customer service may be above or below the engagement level that is offered with your contract or on-premises platform. Ask the following questions to ensure you’re receiving the level of service necessary for your business to be successful:
- Will I have a dedicated account manager?
- Is there a support phone number or chat line available 24/7?
- If we run into an issue or something breaks, what is the process for me to receive live help?
- Unique fields or custom development
While this likely won’t be an option for on-premises or licensed software, cloud-based platforms may offer more flexibility or development possibilities. Areas of the software that you may want to build out would be dashboards, reports, or even menus and navigation, field names, and/or file feeds.
Through your local and digital networks, find out what your colleagues or competitors in the industry are using for their payroll. What works, what doesn’t, what should you look out for, and what do their employees like/dislike? These are important questions or elements to consider when evaluating a new payroll provider.
- When to convert to a new system
Take a look at your budget and your fiscal calendar. What time of the year will allow you and your payroll team to be the most successful in completing the conversion? If you’re integrating with a separate HR or time and attendance software, be sure to include a buffer period to test data transfers.
- Data conversion
During the process of selecting and working with a payroll provider, make sure your contact or implementation representative is well versed in your data needs and what it will take from a conversion standpoint to ensure reduced payroll errors, eliminate duplicate data entries, and provide accurate training on how to pull, read, and increase visibility on reports identifying company trends and valuable metrics.
For companies of any size, there is more than one benefit to embracing payroll technology.
Payroll processes need to be maintained and executed properly to avoid confusion, employee frustration, and ensuing fines. WeWork Business Solutions, powered by VensureHR eliminates the hidden costs of compliance and removes risks created by these regulations. Consider making the leap to streamlined payroll processing. VensureHR can provide a more efficient and effective way of managing payroll.
Julie Dower is a marketing and communications manager working for Vensure Employer Services, living in Chandler, Arizona. A mother to infant twin girls, she holds a Master of Science in technical communications from Arizona State University and a Master of Arts in English from Northern Arizona University.