Payroll solutions ensure your employees get paid while creating a financial paper trail. Find out about payment options and top payroll software.
In order to run a successful business, you need a way to manage your payroll. Your payroll is used to track employee payments. It not only ensures your employees are paid on time and receive the correct compensation, but it allows you to keep a running tally on how much your business spends. This creates an important paper trail, which you need to correctly pay your taxes and calculate your total earnings. Your payroll also serves a secondary purpose, keeping track of how and when your employees work.
Some businesses employ a payroll manager to track employee payment, while others assign payroll tracking to their HR department. Thanks to advancements in technology, tracking payroll changes has become a mostly automated task. There are various software programs that record how often employees work and even automate the payment process. This is much more accurate and efficient than previous systems, which involved manually tracking time cards. While a large portion of the work is done using payroll software, it still requires a payroll manager to oversee the process and make sure all the information is accurately entered.
Choosing a Payment Method
The primary responsibility of a payroll manager is making sure all employees are paid on time, as well as selecting a payment method. There are three primary methods to pay employees. These are through paychecks, direct deposit and pay cards. Each option has their own advantages, but which one you choose is largely based on personal preference and the number of employees in your business.
Checks were previously the most common way to pay employees. While it is still used today by many companies, it is becoming replaced with direct deposit. Checks are convenient because it creates an easy paper trail. It was previously the most convenient option for employees as well, since not all banks had a convenient option for direct deposit. The main reason checks are being phased out is because they must be hand-delivered or sent through the mail. Not only is this time consuming and harder with larger companies, but it increases the odds of the check being lost or damaged before it is deposited. It can also become a hassle for employees, since each check must be cashed.
Direct deposit is considered by many to be the easiest and most preferred method of depositing money. With direct deposit, the payroll manager directly transfers funds from the company into an employee’s account. The process is largely automated with payroll software, creating a regular payment schedule for all employees. This also creates an easy-to-follow paper trail, as well as making generating financial reports easier. Many banks have also removed any sort of fee for direct depositing, so it can save both the company and employees money. Some banks even offer rewards, such as waiving monthly fees if you set up direct deposit.
There are a few potential downsides to direct deposit, most of which you cannot influence. Some banks take several weeks to set up direct deposit, so employees may have to wait to receive their initial checks. Other banks issue a delay on when the funds are released, meaning employees are left waiting several days before the money is accessible, typically showing up in their account as a pending transaction. Because of this, many companies offer direct deposit alongside either checks or a payment card.
Payment cards use a pre-paid debit card to process payroll requests. Payment cards are becoming more popular because of how quickly payments are processed, with funds instantly transferring onto the card. The cards are usable at an ATM, so bank accounts are not required. However, this also means employees must pay ATM fees whenever they withdraw money. Depending on your bank, it may also be inconvenient to transfer funds from a payment card into a traditional checking or savings account. Payment cards are mostly used for part time employees.
Workful is one of the newest payroll management programs, but it has already earned an excellent reputation because of the company’s customer service. As a newer program, it also has some of the most up to date options, including geolocation time-clock tracking. Another convenient feature is the ability for employees to submit business expenses through Workful using an app, ensuring they are reimbursed on their next pay check. It also comes with a variety of tutorials, and many reviewers have praised the simplicity of Workful’s UI. One downside is Workful has limited compatibility with other accounting software. However, it does include many of the other features you need from HR software, especially for a smaller company.
As of writing, a free 30-day trial is available. Once the trial expires, it costs $25 a month, plus an additional $5 for each employee.
QuickBooks is considered one of the best providers of HR and financing software. Many businesses already use QuickBooks for accounting, making it easy to transition into using QuickBooks Payroll. All of the QuickBooks programs share a similar UI, making it easy to learn how to use all the various programs. They also feature seamless integration and provide some of the quickest direct deposit options. There are several account tiers, with the lowest beginning at $45 a month, plus $4 per employee. Upgrading to a premium account increases the cost to $75 and $8 per employee, but it includes HR support.
While Gusto is advertised as a payroll solution for smaller businesses, it works equally well for larger companies. It offers support for both checks and direct deposits, but as of writing does not support payment cards. All of the features are available from the lowest tier plan, which costs $39 a month and $6 per employee. There are many other tiers to upgrade to, which offer expanded services, such as quicker direct deposit and more concise reporting. As your business grows, you can upgrade your account to match your business needs.
Paychex Flex has extensive options for generating reports, making it popular among accountants. It also includes more automated features than other payroll programs. Paychex is compatible with most accounting and HR programs as well, making it easy to integrate into an existing system. There are several account tiers, with a basic plan costing $39 a month, plus $5 per employee. The more comprehensive plans require a custom quote from Paychex directly.