For many new business owners, managing employee payrolls presents a number of questions. Even experienced professionals wonder whether they should invest in payroll software or if they’ll just be able to get by taking care of everything on their own. While payroll software may not be a written requirement for business management, the advantages of a good payroll program are so numerous that it’d be foolish not to consider getting one. Here are some of the top reasons why.
While you’re probably aware that payroll software prints checks, it does a lot more than that, including pay stub generation and third party payroll service reporting and communication. There are other payments you need to make besides employee checks, and payroll software can help with monthly bills, franchise fees and supply purchases. Like outsourced payroll services, your payroll software can print valid bank-ready checks so your employees and creditors needn’t wait for their money. Without payroll software, you would be forced to manually take care of all the details every pay period, and though small business owners may not mind this, it can severely limit expansion.
Do you have an tax consultant who will tell you what tax percentages will be applicable for every employee? If not, payroll software is a good idea. Most packages allow you to store individual data for a large number of employees, so that you can automatically calculate how much you must withhold at each pay period. Income Tax, Provident Fund, ESI, Professional Tax, Medicare and special state taxes are easy to configure. This also includes employer programs like retirement and health care plans, making it easier to manage everything all at once. At tax time, Form 16 are easy to generate, and if you ever have the misfortune to get audited, you’ll be glad to know you can simply transfer all your software records to the tax agent.
Payroll programs can be used to generate automatic reports that depict the status of your professional finances. Because such software is made for frequent use, it may allow you to send reports in any number of file formats or via email. For a business owner who wants to track their internal progress, this accounting aid is essential to getting a quick, on-demand glimpse at the big picture.
Even though payroll software isn’t an outright requirement, the fact that you have some automated method of payroll preparation and management will totally change the way your business operates. Without payroll software packages, you and your accountants will be stretched thin regardless of what time of month it is, because you’ll be forced to stay ahead just to compute taxes, account for overtime and include new employee deductions. When you run a company that needs to maintain a competitive front, not having a payroll software package to take care of the financial end is completely unacceptable.