Is Cloud-Based Payroll For You?
If you’re doing payroll manually, you probably don’t have enough free time to consider an alternative to your current method. You’re acutely aware of the hours it takes every pay period, the incredibly high level of detail involved, and the stress it causes you.
A cloud-based payroll application can help you with two of those three problems. It can’t reduce the minutiae that is required in order to compensate employees and submit taxes, but it can minimize the anxiety that starts to creep in prior to payday and cut down the time required more than you could probably imagine.
There are numerous online payroll solutions available today. Some are integrated with accounting software or websites, while others can be used on their own. They’re subscription-based; you pay a monthly fee. A few offer free trials, and most, if not all, let you cancel if you don’t find the service to your liking.
The most difficult part of using a cloud-based payroll application is setup. Think about all of the paper and spreadsheets and file folders you use to process paychecks and submit payroll taxes and filings now. All of those details have to be entered on the site. Small business payroll solutions are designed for non-financial professionals, so you’ll have a lot of guidance, but it’s still advisable to bring in your accountant as you get started.
Cloud-based payroll applications help you enter and easily access all of the myriad details involved in payroll-processing.
One of the advantages of using a payroll website is that once you’ve entered some information, like an employee’s address or Social Security number or pay rate, you never have to do so again unless it changes. This is why setup takes so long: all those details. The system will prompt you to enter information about, for example, your vacation and sick time accrual policy, your medical insurance benefit, and your retirement plan. It then accesses that data anytime it’s needed.
And because your duplicate data entry—your data entry, period—is so greatly minimized, so are the opportunities for errors.
Setting up your payroll online means storing a great deal of sensitive information in a place you can’t see or touch. But these applications and your data are kept safe on at least one remote server that uses the same level of security that your bank does. The hardware is often locked in an area that is patrolled 24/7 by security guards. If you’re maintaining paper payroll records, or even offsite backups of digital data, you’re still vulnerable to loss or theft.
Ready to Run
You’ve probably never completely forgotten to process a payroll, but you may have cut it close more than once. Cloud-based payroll applications have built-in reminders that don’t let this critical task slip your mind. You may get emails or other kinds of electronic reminders. These sites also have home pages called “dashboards” that contain an overview of your payroll. There are usually links to past and upcoming pay runs, lists of important deadlines, and graphs that display historical payroll summaries.
When it’s time to process a payroll, there’s very little work you have to do other than enter the hours that your non-salaried workers contributed. You’ll assign those hours to the appropriate pay type, like regular or overtime, vacation or sick time, etc. If someone is due a bonus or commission, or needs to have pay garnished or an expense reimbursed, this can all be handled quickly and simply.
You don’t have to consult tax tables or do calculations or look up benefits amounts when you process payroll using a cloud-based solution.
The website does all of the calculating and consulting of records in the background. Taxes, benefits and other deductions are subtracted from each employee’s pay, and a net pay amount is ready to be printed on a check or deposited directly into a bank account. If the site doesn’t submit payroll taxes and filings automatically for you, it prepares them and reminds you when they’re due so you can dispatch them.
All of this happens in an instant once you plug the hours and any additional data in. And just as quickly, you can review employee records and payroll summaries, do simple and advanced searches, and look at reports that are automatically generated for you. Mobile apps make it possible to do much of this work remotely.
Changing the way you do any of your accounting tasks is definitely something you should discuss with your financial advisor. He or she can help you find the right solution for your business, tell you more about your new workflow, and help you gather all of the information you’ll need.