Every day new businesses are launched in America. Small businesses, startups, and “solopreneurs” all face the same challenges when it comes to establishing and growing their respective operations. While payday may be a blessed occasion for employees, for employers, it’s often a stressful event to complete all the necessary calculations and distribute paychecks on time. Fortunately, payroll software offers a simple solution to all of these problems, but before we go over the benefits of small business payroll software, let’s take a look at the most common challenges faced by SMBs.
Common SMB Payroll Challenges
In 2018, uncertainty, complexity, and financial burden were all cited as main concerns for SMB owners. Times haven’t changed much in the world of payroll processing, so these points still remain an issue for many small businesses. The regulations relevant to payroll are constantly changing and can be difficult for small businesses to comply with, especially if they employ workers from multiple states. These rules aren’t written in an easy-to-understand manner, forcing many companies to hire an HR specialist to ensure that their practices remain compliant with federal, state, and local regulations.
Unfortunately, specialists don’t come cheap, but many consider them a necessary expense. Without them, SMBs are left vulnerable to fines, license revocations, and lawsuits resulting from a lack of compliance. Further complicating matters is the actual payroll itself, which may cover many employees and include multiple pay periods. Some owners decide that the best solution is to manage their payroll themselves, but without any payroll software to assist them, these owners quickly realize the true amount of time that payroll requires.
Now that we know the common challenges associated with managing small business payroll, we’ll briefly review the traditional approach to managing payroll that many companies still rely on, despite superior alternatives being available.
The Traditional Approach to Payroll
In the past (and continuing today), payroll was typically managed in one of two ways: using an in-house team or employing a specialist. Both of these options have drawbacks, so let’s compare them.
In-house: There’s no way around it—employing a team of in-house employees is expensive! The average cost comes out to $7,646 per employee to manage their pay while ensuring that all governmental compliance requirements are met. As you can see, costs quickly add up. In addition to high expenses, the in-house staff managing payroll will spend a lot of time solely on payroll, pulling them away from other key business tasks like benefits management and HR duties.
Specialists: The advantage of outsourcing your payroll to a specialist is a much lower cost per month. Payroll processing companies can charge base prices as low as $40 per month, but these basic plans come with a plethora of limitations. It’s important to consider all hidden costs to determine the actual amount you’ll be paying per month. Some payroll processing companies offer transparent pricing, but many others don’t include additional costs (such as per-employee fees, paycheck distribution fees, tax filing fees, or time-tracking costs) in their base prices.
The Benefits of Using Payroll Software
Like using an in-house team or hiring a specialist, small business payroll software manages your payroll, taking care of distribution while ensuring compliance with all relevant government regulations. However, unlike in-house support, payroll software won’t require a bunch of additional employee effort. Systems like UZIO provide fully automated payroll management, so you only need to add employees into the system—the software will take care of the rest. Also, you won’t have to worry about compliance issues when using payroll software. For small business owners, it can be hard to stay up-to-date with federal, state, and local requirements, but the software automatically updates to ensure consistent compliance.
Your employees are going to have a merrier time as you will be able to process payroll way faster than you have been doing it. You have the ability to deposit directly to your employees’ bank accounts. Besides, you will be left unbothered from petty tasks such as providing pay stubs, essential documents can be stored digitally for employees to access anytime they want.
Beyond accurately calculating payroll, managing paycheck distribution, and keeping your company compliant, many small business payroll software options also offer other services for a minimal additional cost. For example, UZIO can provide your business with payroll services, but also offers benefits management, time tracking features, boarding/offboarding solutions, cloud-based employee self-service, and other HR tools all on a single platform. Using software like this can provide tremendous advantages for your business by placing your payroll and HR on the same platform. This automatically updates, syncing information across departments and reducing the amount of time spent on redundant paperwork.
Traditional approaches to payroll may have worked in the past, but as the world is steadily switching over to a remote working environment, cloud-based payroll software is becoming a requirement for any business that wants to be competitive in their industry. Considering small business payroll software for your company? Enjoy this 30-day free trial, compliments of the team here at UZIO!