Top speed, ease of use, security should be studied in payroll software search
Try to avoid problems similar to those at Arizona State University, where a new payroll software system underpaid or overpaid about 3,000 employees, angering them so much that armed police guarded the university's HR office on several recent paydays, The Wall Street Journal reported. While the IT department fixed 84 percent of known payroll problems within four days, Allan Crouch, who works in the university's human-resources department, said, "Morale is the lowest it's been in the 14 years I've worked here."
Another cautionary tale: According to the IRS, 40 percent of small businesses pay average payroll penalties of $845 per year for late or incorrect filings. So it makes sense to fully investigate all the options to find the best.
Some considerations:Speed - Of course, reducing the time it takes to calculate payroll to a matter of minutes or seconds is a prime attraction of payroll software packages. Systems should be able to easily calculate complicated deductions. Make sure the system can handle different wage formulas, multi-state taxes, 401(K) plans, profit sharing, cafeteria benefit plans, vacation and sick time plans.Efficiency - The system you chose should enable you to increase the number of clients you serve.Security - Social security numbers, bank account numbers and other personal data should be shielded from identity theft. Find the most secure software available. Make sure the software provides an audit trail and backups in case of problems, advises software-expert.org. According to CPA Technology Advisor, most advanced payroll systems can provide secure online portals so employees can look at prior pay stubs and W-2s, make requests for time off or notify payroll and HR personnel of changes to dependents, address, and filing status.The needs of your clients - For businesses with fewer than five employees, a basic program to assist with calculations may be enough. Larger businesses may want more functions and features. According to CPA Technology Advisor, some businesses want a totally hands-off systems where they provide the accountant with basic employee timesheet data. Some business owners want to perform most of the processing work, including check printing, but with the CPA professional having access to the payroll program for review and reconciliation tasks. Still other clients may want to hand off nearly all tasks to the accounting firm; in turn, the accounting firm may want to outsource the functions to a payroll service provider. Extra features - Consider a payroll program that also provides other data, for example, on attendance and hours worked or other staff costs, says software-expert.org. Test, test, test - Take advantage of free demos and trial periods. If the software is not easy to use, you'll be spending more time on training than you want. If it's not flexible and intuitive, keep looking.Good technical support - Purchase software from a company with a well-respected reputation and established base of customers. Make sure it will fit with your existing hardware and any other accounting software you're using.