Payroll: It’s not the most glamorous or exciting part of running your business, but it’s essential. Without it, the members of your temporary and permanent staff may not get paid on time or in the correct amounts. And the more team members you have, the more complex payroll tends to become. It’s likely you run payroll weekly for your temporary employees to be paid quickly. It’s much easier to do so in-house than to subcontract this service outside your firm. That’s where payroll software solutions come in.
By using payroll processing system software, you can run your payroll faster and more efficiently, freeing up your team to focus on core business objectives and operational goals. But what exactly does payroll software look like, and what does it do for your business? And perhaps most importantly, what are the benefits of using this kind of software?
Let’s examine what payroll software is, how it functions within your staffing firm, and what kind of benefits you can expect from using a payroll software system.
What is Payroll Software?
Every pay period, an employer must calculate and distribute each employee’s wages. But the process is a bit more complicated than that—employers must deduct wages for federal and local taxes, Social Security, unemployment insurance, worker’s compensation, and other areas. Garnishments and deductions for temporary agencies alone can be very time consuming and change daily. Having to communicate this to an outside vendor rather than handling each deduction yourself, saves time and energy and reduces errors. Then, the employer is responsible for distributing paychecks to employees in the proper manner when payday comes around. Most employees opt for direct deposit or paycards for fast availability of funds and saving time to collect and cash a check. A lot of work goes into this process, and it gets more complex the bigger the team is. Many staffing firms employ hundreds to thousands of employees weekly, with multiple assignments and new start and stop dates. That’s what makes payroll software through COATS so effective.
Payroll software is defined as an on-premises or cloud-based software solution that manages, maintains, and automates payments to employees. Payroll software integrates with other business systems you have in place to make sure your employees receive accurate and on-time compensation through the right medium (direct deposit, pay cards, physical checks, etc.). Doing payroll manually, as you can imagine, is much more time-consuming and complicated, and there’s far more room for error when it comes to tax withholdings and other important areas of the payroll process.
How Does a Payroll Software System Function in Your Business?
We’ve learned about the basics of what payroll software is. How does it function within your business to take the burden of payroll off your HR staff? While there are many ways that a payroll system can function within your operations—it depends on your needs, the software, your business type, and many other factors—these kinds of software systems generally perform a few basic functions for most businesses.
Payroll software systems can:
Generate Employee Pay Statements
Most states mandate that businesses provide their employees with pay statements when they receive their wages. Things like gross pay, hours worked, pay rate, and deductions must be displayed for each pay period. Using payroll software to generate pay statements automatically is much, much easier than doing it manually. Plus, the software can generate electronic statements which are helpful for online employee access and record-keeping purposes.
Prepare Tax Forms
When tax season rolls around, flexible payroll systems are your business’s best friend. The software can automatically generate all tax forms needed by employees and contractors, including Form W-2, Form W-4, 1099s, and many more. And if you employ temporary employees in different states—all of which have different tax rates and regulations—payroll software makes your life a lot easier. COATS collects and updates tax rates in all states across America.
Promote Employee Self-Service
Most payroll software solutions allow employees themselves to access their pay records. Self-service means employees can view their pay history, deductions, hours worked, and benefits, among other things. Some staffing firms also offer time-off requests online where employees can submit a request electronically rather than having to contact human resources or go to their supervisor.
What are the Benefits of Using a Payroll Software System?
Payroll software works within your business to generate pay statements automatically, streamline employee self-service, prepare tax forms, reduce input errors, and more. What kind of benefits do these features provide for your business? While there is a long list of great reasons to use a payroll software system, some of the most important include:
Ensuring Tax Compliance
One of the hardest parts of processing payroll manually is accounting for tax withholding for each employee. Failing to account for the right deductions for payroll taxes, federal and local taxes, Social Security, Medicare, unemployment taxes, worker’s compensation and more can cause compliance issues—and you don’t want the IRS on your back. Payroll processing system software takes the hassle and worry away from this process—it will make the necessary deductions for you so that your business stays compliant.
Another way that payroll software helps you avoid compliance issues is by avoiding misclassification of workers. It’s all too easy for contractors to be misclassified as W2 employees, or vice versa; an employee could be entered into your system manually but not show up for their first day, drawing a paycheck even though they didn’t work. Your payroll software can catch errors like these and avoid costly misclassifications.
Another one of the big benefits of flexible payroll systems is that they automate so much of the payroll process. You or your HR team don’t have to spend countless hours inputting data manually, making deductions, and distributing pay statements. You can rest assured your employees are paid accurately and on time every pay period thanks to a payroll software system. That frees up your management and core staff to focus on the tasks and initiatives that build revenue, rather than worrying about payroll headaches.
Reduce Input Errors
When your HR department handles payroll manually, there’s always the chance of human error. And missing one zero here or a decimal point there can have grave consequences. When a payroll system handles the process for you, the chance of input errors goes down dramatically. And because most payroll software systems can alert HR staff when a discrepancy is found, errors can quickly be identified and corrected when they do occur. Not making an employee wait for their pay is critical to your staffing firm, your client, and your staff member.
Cost Effective & Responsive
Using a payroll software system is cost-effective for two reasons. One, you’re saving your team hours and hours that you would otherwise spend processing payroll manually—time is money, and this software helps you save a lot of it. Secondly, you’re reducing the risk of errors in terms of tax withholding and compliance, which can prove very costly. Third, you are not paying ADP or another payroll service for each paycheck and tax form processed. Fourth, when a client reports time worked late for your temporary employees or when your staff makes an error – your temporary employees can still be paid immediately. Telling employees, they need to wait a week to have their pay processed when it was not their error, isn’t the best way to recruit new temporary members or keep them on board.
Automated payroll software can provide reports and insights into your overall payroll picture. That data can even be made into graphs and charts that your company can use to inform critical business decisions. Your business might use this information to determine where you can cut back on spending, for example, or where you can afford to spend more.
In addition to the automated features of a payroll software system saving you and your team critical time, using this kind of software ensures timely payments to your employees during every pay period. Your system can send out reminders when it’s time to do payroll, as well as streamline the direct deposit process. Most staffing firms pay their employees every week, this is done much easier in house than subcontracting out. Any errors or changes can be made immediately and another batch of paycards can be run without employees waiting a week to be paid.
Your employee’s personal information needs to be protected, and a payroll software system can help with that. The system will ensure that only the right people have access to the information they need, and that payment amounts, and times are correct for each employee. With more employees working from home and more businesses employing independent contractors and temporary workers, this is more important now than ever.
If you process all your payroll manually, it can be difficult to adjust and adapt when your business changes. Payroll software makes it easy to scale up, when necessary, if you add more employees or open a new office, for example. Should you open a new location in a different state, the software will automatically use the new tax rules for that state, saving you the hassle of inputting that information manually.
Integrate a Payroll Software System in Your Business with COATS Staffing Software Today
It’s plain to see why using a payroll system at your business is such a smart decision. This software manages your payroll end-to-end and takes care of everything from generating employee pay statements and preparing tax forms to promoting employee self-service.
Automating the payroll process in this way not only reduces the chance of errors and maintains proper tax compliance, but it also saves you and your team a lot of time. Other benefits of payroll processing system software are that it’s cost-effective, it gives you useful reporting and insights, it boosts security, and allows your business to scale and adapt more easily.
Looking for affordable payroll software where you can keep this process in-house? Need payroll software for your small business or multi-state operation? No matter the size or scope of your needs, COATS Staffing Software can provide you with the flexible payroll systems you’re looking for. We serve industries like the technical, medical, clerical, industrial, professional, and financial fields, among many others, and we’ve been helping organizations by supplying staffing software solutions for more than 25 years.
Get in touch with the COATS team today to schedule your free demo. We’re here to help your business with its payroll software system needs.