Some accounting software comes with payroll features built-in or as an add-on option. There are also stand-alone payroll applications available. Which one you choose will depend on the requirements of your specific business, but here are some points to bear in mind:
- Work with what you have
Does your business already use accounting software? See if it has in-built payroll or if you can add a payroll application to it. If not, it’s time to upgrade. - Find out if it is easy to use
Choose a payroll package or payroll accounting software add-on that your accountant or financial adviser can also use. Keep it simple to avoid swapping files in different formats. - Go online and use the cloud
These days it makes sense to use cloud-based accounting and payroll software. You can access your payroll information anywhere and at any time, and share information with trusted partners. Plus there’s less IT support work required. - Make sure it can grow with you
You may only have one or two employees now, but no doubt you’re aiming high. With scalable payroll software you won’t have to change systems as your company grows. - Ensure it can do real-time recording
Make sure the payroll application you choose keeps accurate, up-to-date, real-time records of payroll operations. - Get recommendations
Ask your accountant or bookkeeper, financial advisor, bank, business partners and owners of similar companies to yours. See what they recommend. - Check the reporting requirements
Check to see what types of report are available with your chosen accounting or payroll package. Ask your accountant which ones might be useful for your business.
A six-point checklist for great payroll
Having the right software is only part of the payroll solution. Now you need to use it properly! Setting up your payroll system properly at the start can save you a lot of time and headaches later. Here are some guidelines:
1. Register your business
Ensure your registered business number is included in all your payroll documentation and any forms you submit to the tax office
2. Record your employees’ data
Enter all your employees’ information in your payroll system, such as their name, address, welfare ID number and deductions (if taxes need to be taken out). Also include contact details, salary, days off, sick days, overtime and any other compensation. Check local regulations to find out what data you must include.
3. Do the paperwork
Make sure your staff complete all necessary tax forms and return them to the tax office. Do the same with your own forms.
4. Decide on payment periods
How often will you pay your employees? It might be weekly, monthly or fortnightly.
5. Keep up to date
Plan on having payroll information updated regularly. Do this yourself or get a bookkeeper or your accountant to do it.
6. Set up an archive
For records that need to be kept for several years, think about how you’ll archive them. Good payroll accounting software will do some of this for you but you’ll still need some paper archives for documents like tax forms.
As well as these ideas, look into other useful features such as automated calculations of taxes, direct deposit management and timesheet handling. Think carefully about what you’ll need and choose wisely, because if you get it wrong it can be hard to migrate from one payroll system to another.
You can make life easier for yourself by choosing the right payroll accounting software and setting it up properly. Get whatever help you need from your accountant and the tax office to make sure this is done properly. Putting in some effort now will save you tons of time and expenses as your business grows and you take on new employees.
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Source: Xero.com
