Fed up with payroll headaches?
Human error is costing small businesses thousands each year on payroll mistakes. The scary part is that most of these mistakes are preventable.
Here’s the catch…
Desktop payroll software has been the standard for ages. It’s reliable, secure, and allows business owners to maintain control of their employees information.
But choosing the right software can be tricky. With so many options how do you know which desktop solution is best for you?
Let’s dive into…
- What Desktop Payroll Software Is
- Why You’d Still Choose Desktop Software
- Key Desktop Software Features
- How to Choose Desktop Payroll Software
What Is Desktop Payroll Software?
Desktop payroll software is installed on your computer locally.
(Different than payroll services in the cloud that you access through your browser.) Desktop software keeps all of your files on your own hard drive or company servers.
Software will manage:
- Employee wages
- Tax withholdings/filings
- Direct deposits
- Yearly W-2 Forms
- Benefits deductions
- and much more
While payroll used to require tedious manual calculations. Software takes the workload and minimizes your chances of error.
Which is important considering…
Businesses with payroll software made 31% fewer errors according to G2 research. That’s a big deal when errors can directly impact your pocket.
Why Small Businesses Should Still Choose Desktop Software
Everyone thinks cloud software is the next best thing nowadays.
But that doesn’t mean desktop payroll software will go away. There are countless reasons why small business owners continue to run payroll from a desktop.
Let’s take a look
Data Control
When you run payroll from a desktop software your information never leaves your office. There are no third party servers to worry about or who else can access your employees information.
If you deal with sensitive financial data. This is something you can’t put a price on.
No Internet? No Problem
Did your internet go out on payday? If you use cloud-based payroll software you’re in some serious trouble.
With desktop software comes the ability to go offline. Your pay day process will complete regardless if you have internet access or not.
One Time Payment
Another perk of desktop software is that you can own the software outright.
While many cloud payroll services require monthly payments that never end. Desktop software offers perpetual licenses that you only pay once.
Keep these things in mind when you choose desktop payroll software.
How Much Do Payroll Mistakes REALLY Cost?
Payroll mistakes are more expensive than most small business owners think.
Let’s look at a couple quick stats…
Did you know that 50% of employees start job hunting if they experience 2 payroll mistakes? Yup, that means if you make one payroll mistake you are already halfway to losing that employee.
Employees aren’t the only thing you lose when you make payroll errors.
- IRS penalties
- State penalties
- Time & money to correct/reprocess
- Lost time chasing down errors
The average business owner makes about 15 payroll errors per payroll period.
That adds up quickly and is exactly why you should consider investing in a good desktop payroll software. They can help prevent costly mistakes like the ones mentioned above.
Desktop Payroll Software Features You Need
When you start looking at payroll software, you will notice that not all software offers the same features.
Some are great for basic payroll processing. While others seem to offer your entire business in one software solution. Before you spend money and commit to one solution. Make sure the features below are included.
Automatic Tax Calculations
Software should automatically calculate your employees federal, state, and local taxes. If they have to calculate this manually, that’s when errors will happen.
Direct Deposit
Direct deposit is expected by most employees. If your software doesn’t offer direct deposit you’ll have to outsource to another service.
Reporting
Don’t settle for payroll software that makes you feel like you need to be a CPA to understand their reports. User friendly software will offer comprehensive reports with the click of a button.
Year-End Processing
You’ll need to distribute W-2’s and 1099’s to employees every January. Look for software that does this automatically.
Employee Self-Service
One benefit of even desktop software is that they offer employee self-service portals. Where employees can view their pay stubs and tax forms. This will help eliminate questions from your HR department.
Desktop Vs Cloud Payroll: Which Is Best?
Deciding between desktop and cloud payroll software can be difficult.
Here’s a few things to think about before making your decision.
Opt for desktop payroll software if:
- Security and control are your main concerns
- You need access to payroll when offline
- If you want to make a one time purchase
- Your business is based at a single location
- You want to manage your own updates
Consider cloud payroll when:
- You have remote employees in multiple locations
- You want software to automatically update
- You need access from multiple devices
A lot of small businesses with less than 50 employees find desktop options to be more affordable and easier to use.
How To Get Started With Desktop Payroll Software
Decided desktop is the way to go? Great! Let’s go over some steps to help you choose and implement payroll software.
Step 1: Identify Your Needs
How many employees will you be running payroll for? What States and Federal taxes do you need to account for? Figure this out before you begin your search.
Step 2: Compare Software
Look at software features, pricing, and support options. Research other businesses similar to yours and read what they have to say.
Step 3: Confirm Computer Requirements
Since payroll software will be installed on your computer. You’ll want to ensure your computer has the requirements and can handle it.
Step 4: Plan To Move Your Data
Transitioning from manual payroll will require you to move current employee data. Be sure to export any data you have and have it ready to import.
Step 5: Test Run
Before going live it’s smart to do a trial run. Many software allows you to run payroll twice the first month to ensure everything is working properly.
Common Desktop Software Pitfalls To Avoid
Sure desktop software does a lot of the work for you. But there’s still things you need to do to avoid simple payroll mistakes.
Here’s a few to keep in mind:
- Forgetting to update your software. (Tax tables, etc.)
- Not backing up your payroll data.
- Forgetting to reconcile reports.
- Not understanding employee classification rules.
- Missing deadlines.
Desktop Software Takes The Guesswork Out Of Payroll
While there are pros and cons to both desktop and cloud software. Desktop software is a great option to keep things simple.
Don’t worry about the technical stuff, automatic payroll software will:
- Save you tons of time in the long run
- Reduce costly payroll mistakes
- Keep your employee information safe
- Allow you to maintain control
Desktop payroll software often:
- Stores data on your computer’s hard drive
- Help’s eliminate costly mistakes with automation
- Include key features like tax calculations and year-end reporting
- Offers a one time purchase price
Make sure to plan, test, and take your time when transitioning to a new payroll software.
Your software will only be as good as the research you put into finding the right solution for you. Take time to evaluate your business and find software that fits your business size, budget, and security needs.
Thank me later. Your employees (and accountant) will thank you too.
