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Payroll Systems for Small Businesses

Why do You need a Payroll System?

One of the challenges that comes with starting a new business is figuring out all the systems that you need have in place to run things. If you have any employees, one of the necessary items that you’ll need is a good payroll system. If you have never chosen a payroll system before, it can be a little bit intimidating. Payroll costs are one of your largest business expenses so it pays to choose a payroll system carefully. Here are a few things that you should look for when choosing a payroll system.

Ability to Integrate With Accounting Software

Payroll Systems for Small Business When you are using a payroll system, it needs to be able to integrate into your current accounting system. If you don’t have an accounting system yet, you have a little bit of flexibility when it comes to choosing both of them. Your payroll system needs to be able to download the entries from your accounting system. This will make things a lot easier on you, instead of having to manually enter all the information twice.

Scalable System

You may also want to choose a payroll system that is considered scalable. If you have a payroll system that is highly scalable, it can grow with your business. This makes it possible for you to avoid switching payroll software once your company starts to grow. If your company is highly successful in gross quickly, you don’t want to have to completely redo the payroll system at that point.

Fits Into Workforce Management System

When choosing a payroll system, you should make sure that the system fits in well with all of the rest of your workforce management system. Most companies use some kind of workforce management system to handle all of the different areas of having employees. For example, you may need some kind of time tracking software that allows employees to clock in and out. If the payroll system integrates with this time tracking software, you’ll be able to avoid a lot of extra work entering timesheets into the system. A lot of the good payroll system programs integrate with many other workforce management systems.


Another factor that you should look for when picking a payroll system is support. You don’t want to choose a payroll system that leaves you high and dry when you need help. Look to see what types of customer service the company offers. If you have to pay a certain amount of money every time you want to talk to someone on the phone, this is not a good sign. You may also look for a company that offers an online knowledge base, so that you can look up answers to some of the most common questions on your own. This can be a lifesaver when you are trying to start using a new payroll system.

Handles Your Taxes

Instead of just helping you figure out payroll and send out checks, your system also needs to be able to handle your taxes for you. You need a system that takes care of all of the tax withholding for the various federal, state, and local taxes. Then when it comes time to file your taxes, you need a system that will give you will be information that you need at once. This will make your life a lot easier when dealing with taxes.

Employee Self Service

When handling payroll, you may find that you are overwhelmed with the number of employee questions that come your way. They may ask you how many hours they managed to get last week or some other question about a specific matter regarding their payroll. While there is nothing wrong with answering a few questions, they can consume your entire day if you let them. Because of this, having an employee self service function is essential. Many payroll systems allow employees to set up accounts and login through an online portal. This makes it possible for employees to look up answers to their own questions instead of having to bug you about them.

Reporting Options

From time to time, you may need to print out some reports with information from your payroll system. Because of this, you need to choose a payroll system that has a variety of reporting options available to you. You’ll be able to print off all of the reports that you could possibly need, which will help you look at the big picture of your business easier.

Overall, having the right payroll system for your business can make a huge difference. Spend a little time looking for a payroll system with a good reputation, produced by a well-known company. The difference that it can make for your business could be profound.

About the Author:

Chris Keenan blogs on a variety of small business subjects on behalf of small businesses.

See Also:

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The Basics of Starting a Small Home-Based Business

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Trends in Business Accounting