Payroll can be a painful process. Believe it or not, there are still many businesses out there that pay their employees by cheque. Paying employees by cheque is the equivalent of me writing this blog post on a typewriter. Not only is this a huge inconvenience to you as the business owner and to the employees, it is also costly to your business. Your time is better spent focusing on your customers and operations than it is on payroll. It may seem small but automating a process such as payroll is the difference between a successful business and poorly run business.
Plan Ahead
Even if you are only paying 1 or 2 employees, you need to start thinking about your payroll process now. I have worked for several large businesses and I can tell you it is much easier to make a change to your payroll system when you have a couple employees than when you have 10+ employees. Invest the time now and thank yourself later.
Just like everything else in our world, there has been substantial improvements in the automation of payroll. I will discuss some of the best practices and most reputable software-as-a-service (SaaS) payroll providers in the market for small businesses.
Timesheet Systems
Ideally your timesheet software should be integrated with your payroll system. You can avoid having to copy data between systems, such as the number of hours worked per employee. You would think most timesheet and payroll systems would be connected, but many are not!
The BDC wrote a great article on different payroll system and which are free.
Personally, I would be willing to pay for a timesheet system if it meant I could save time and hassle. If you are using QuickBooks, I would suggest using TSheets by Intuit. The pricing is $10/user per month plus a $30 base fee. I have personally used this software and found it to work well. What's nice about using TSheets, is that it will fully integrate with QuickBooks Online, so you don't have to transfer data between the two systems.
Payroll Systems
For payroll systems, you want to ensure that it follows your local legislation. The software provider should be making frequent updates for changes in tax rates and legislation. If you are in Canada, most of the big names like QuickBooks and Rise Payroll will update tax tables based on Canadian legislation. Ideally you want a system that will calculate CPP, EI, and any other deductions or benefits. A payroll system should also take care of sending paystubs by email to your employees. This can be a tedious task otherwise.
Direct Deposit
In many businesses, paying employees is a third process or system. Either you use a service like Telpay, file delivery at a bank or maybe you are old fashioned and still give your employees cheques. There are some providers out there that now offer payroll deposits as part of the payroll system. Quickbooks Online and Rise Payroll are two that come to mind. Again, having systems that are integrated or apart of the same system is ideal as it reduces the time and room for error that comes with transferring data between systems.
Another important aspect of a payroll provider is the security of their system. You will be storing your employee's social insurance numbers, addresses, birthdates, and banking information. You do not want to give this information to an untrustworthy software provider. Picking bigger names, such as Intuit, is generally safer than some of the smaller less known brands.
At Horizon, we specialize in setting up payroll and accounting systems for clients. Ensuring these systems are properly setup is the base for excellent financial reporting and organized tax preparation. In addition, setting up these systems saves time, money and headache for your business. If you are thinking about making a change to your businesses support systems, please contact us!