Lauren Burke As a startup, managing your finances in-house can be a challenging task, especially when it comes to payroll management. Time tracking, taxes, withholdings, W-2s, and spreadsheet documents — particularly in remote work environments — are not only challenging, but it’s also significantly time-consuming. On top of running the correct payroll calculations, you must also manage varying employee benefits, expenses, PTO, and performance bonuses, all while double- and triple-checking your work to ensure everything is accurate.
It’s data entry in its least enjoyable form. In fact, 49% of small business owners are frustrated by the complications of the payroll process. Whether it’s you running payroll or an accounting employee, the time you spend on these tasks is much more valuable when it’s directed at customer service, employee culture, business analytics, and business growth efforts. So why not let payroll software do the heavy lifting for you?
To streamline the process and avoid errors, startups should consider using payroll software to automate rote tasks and house their financial records. With numerous payroll platforms and payroll providers out there, choosing the best one for your startup can be overwhelming. In this article, we’ll discuss 10 must-have features every startup should look for when selecting a payroll system.
1. Proactive onboarding and ease of use
When it comes to onboarding, it is crucial to prioritize accuracy and compliance proactively rather than reacting to errors with speed. When dealing with payroll, it is essential for individuals to place accuracy above timeliness.
When talking to a prospective provider, ask them what the setup process looks like. What kind of technical resources will it require, if any? Is it simple and straightforward?
Prioritize software solutions that have:
- A clear setup and onboarding process
- A user-friendly interface
- An intuitive navigation
- Easy-to-understand instructions
If you request a demonstration, ask them to walk you through the setup process as well so you can see it firsthand before you make a decision.
2. Automatic tax calculation
Most employers in the United States (U.S.) must pay Federal Insurance Contributions Act (FICA) taxes. These deductions include federal, state, and local taxes, as well as social security and Medicare taxes. These tax requirements can become cumbersome due to the varying cities, states, and countries where employees may live. Add income brackets, part-time vs. full-time employees, and 1099 contractors to the mix, and the complexity grows.
Find a payroll software provider that can automatically calculate these deductions as well as any voluntary deductions like 401k, HSA, or charitable contributions. It will take a lot of mind-numbing brainwork off your plate, help you avoid costly errors, and ensure that your employees are paid accurately and in a timely manner.
3. Employee self-service
One of the benefits of payroll software is that your HR administrator doesn’t have to be the point person for requests for W-2s, benefits information, or salary-related questions. With an employee self-service portal, everyone on your team can access their pay stubs and change their personal information online.
This saves you and your HR admin loads of time that used to be spent
- Answering emails and phone calls
- Hunting through multiple systems to find an answer
- Digging through stacks of paper or filing cabinets
This payroll feature is a must-have for your administrative team who have higher-value tasks to focus on and employees who need quick answers and easy access to their information.
4. Online payroll reports
The data you collect across the business is only useful if you can easily access and use it. If you are still aggregating data from multiple spreadsheets and systems to run reports, you’ll want a software solution that removes this effort and gives you a real-time, birds-eye view of your payroll.
The software you ultimately choose should generate online reports that can be customized and exported. This feature can help you keep track of your payroll expenses and identify where to cut labor costs.
5. Integration with time and attendance software
To make the most of your software investment, streamline your time and payroll processes with a comprehensive employee time tracking system. This helps you:
- Gain enhanced visibility into workforce trends.
- Effectively manage costs.
- Simplify tasks such as time off management, holiday tracking, accruals, absences, and scheduling.
- Experience a significant improvement in payroll efficiency.
As you can see, integrating payroll and time can significantly improve payroll runs, and help contribute towards making bookkeeping more efficient.
6. Mobile access
Mobile phone and tablet usage are through the roof — over 86% of the world’s population now uses a smartphone. Even if you aren’t convinced you need it now, a payroll platform that offers mobile access will be essential to your startup as it grows in the coming years. And as you’re looking at software options, you’ll want a platform that can scale with your organization.
With mobile access, employees can access their personal information, pay stubs, PTO balances, and more from their smartphones or tablets. This feature is valuable for your entire team but especially convenient for employees who work remotely or are frequently on the go.
If this feature seems negotiable, think again: it will make a significant difference down the road.
7. Secure data storage
From employee social security numbers to bank account numbers to tax filings, payroll software houses a mass of important, sensitive information. This information must be protected for the sake of your employees, your business, and your own legal liability.
As you’re searching for the right solution, ask detailed questions about the security of each application and its infrastructure. Your chosen platform should store employee data securely by:
- Using data encryption
- Complying with industry standards such as SOC 2, PCI, and HIPAA
- Offering user authorization/multi-factor authentication
- Requiring passwords to follow stringent protocols
- Having SSAE 18 Type II certification
8. Automatic updates
Reputable software providers understand the importance (and challenge) of keeping software updated and will automate this process so you are always on the latest version. Automated updates ensure that you have the latest security patches, the latest and greatest features, and a lower frequency of downtime.
Be sure to select a provider that also updates software functionality based on changing government regulations. Compliance is a moving target that is as complex as it is necessary. Payroll software that makes it easy will free you of a lot of unnecessary stress and worry.
9. Direct deposit
This might go without saying, but it’s still worth saying: Payroll software should offer direct deposit capabilities. This basic payroll feature can save you time and resources by eliminating the need for paper checks. It also builds trust with your workforce because they know their paycheck won’t get lost in the mail, placed on their desk after they’re gone for the day, or unintentionally left in someone else’s hands.
It also removes the extra step of traveling to the bank to make a deposit — which means less effort on your part to replace and reprint lost paychecks. An added value to direct deposit is providing your employees with the options to receive their earned wages early, via on-demand pay. Startup businesses should consider this add-on to direct deposit as it can effectively retain employees throughout the journey to achieve success.
10. Tax filing services
Your chosen payroll software should offer tax filing services, including the filing of federal, state, and local payroll taxes. Instead of managing varying tax rates, deductions, exemptions, compliance requirements, and tax forms, you can let the platform do the leg work — you just have to review and submit.
This feature saves a significant amount of time, but it also helps you reduce errors, avoid costly penalties for late or inaccurate tax filings, and feel confident that you haven’t missed anything important.
How to Know Which is Right for You
When evaluating the value and benefits of different software tools, it is essential to consider what is most important for your business. Take this top 10 list, for example, and ask yourself: Which of these features is the highest priority? Which ones will free up the most time for me and my employees?
Then consider what additional functionality you might like. Document your highest priority needs and compare them against the features each provider offers.
Also, be sure to ask other startups and small business owners what payroll platform they recommend. Your colleagues might have direct experience that can tell you which platforms to pursue and which ones to avoid.
After narrowing down your choices, be sure to take a tour of the software to make sure it is a good fit for your business.
Comparing The Options
To help you further, we’ve compiled a comparison of five popular payroll software providers, based on our research and the insights from our friends at G2.
|
PrimePay Payroll |
QuickBooks Payroll |
Paychex Flex |
Gusto |
ADP Workforce Now |
|
|
Ease of Setup |
9.8/10 |
8.1/10 |
8.4/10 |
8.5/10 |
7.6/10 |
|
Ease of Use |
9.3/10 |
8.4/10 |
8.5/10 |
9.0/10 |
8.3/10 |
|
Quality of Support |
8.8/10 |
7.3/10 |
8.5/10 |
7.8/10 |
7.9/10 |
|
Direct Deposit |
9.4/10 |
8.8/10 |
9.4/10 |
9.3/10 |
9.2/10 |
|
Tax Calculation |
9.3/10 |
8.9/10 |
9.2/10 |
9.0/10 |
9.0/10 |
|
Automatic Tax Payment |
9.4/10 |
9.1/10 |
9.2/10 |
Feature Not Available |
Feature Not Available |
|
Mobile Employee Self-Service |
8.7/10 |
7.9/10 |
8.5/10 |
8.4/10 |
8.1/10 |
|
Online Payroll Reporting & Dashboards |
8.8/10 |
8.5/10 |
8.7/10 |
8.6/10 |
8.3/10 |
*Note: The data in the above chart is subject to change based on G2 reviews.
*Chart Sources: G2 Comparison (QuickBooks), G2 Comparison (ADP Workforce Now)
Still not sure?
If you’re still not sure which payroll platform to choose, consider speaking with one of our payroll professionals at PrimePay who can help you select the best payroll software that suits your business needs.
Get in Touch
If you’re ready to start streamlining your payroll processes and save time and money, contact us today to learn more about our payroll services. We offer a variety of payroll solutions designed for startups, from full-service payroll to online payroll, including easy-to-use software, automated tax calculations, and excellent customer support. Let us help you take your business to the next level with our top-notch payroll solutions.
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