Tired of spending hours each month struggling with payroll frustrations?
If you’re like most business owners, payroll day is a major source of dread.
Filling out paychecks is dull, repetitive, and all too easy to mess up. Make one little mistake, and you could end up costing yourself thousands.
Fortunately, with the right desktop payroll software implementation, you can transform your payroll process into a painless, time-saving task that just works.
Let’s dive into how to make that happen.
In this article, we cover:
- Desktop Payroll Software 101
- Why Desktop Solutions Are So Effective
- How to Implement Software in 6 Steps
- What to Look for in Features
- Avoidable Mistakes to Watch Out For
Desktop Payroll Software Explained
Desktop payroll software is a computer program that processes and calculates payroll, tax withholding, and employee payment right on the computer.
Unlike cloud-based programs, the software, data, and files are stored on your business’s computer(s) or an internal server. You have full control of where payroll information is located.
Why does this matter?
Data privacy and security are a hot topic for companies large and small. The benefits of using desktop payroll software to save time on tedious payroll tasks are many. But for many businesses, the most appealing factor is that it can all happen without their data leaving the office.
Desktop software takes care of everything from the basic calculations of wages and overtime to tax withholdings, generating pay stubs, and other repetitive tasks that would take up hours of valuable time each pay period if done manually.
Why Desktop Payroll Software Outperforms Manual Processing
Switching from manual to desktop software will completely revolutionize the way you think about payroll. Let’s take a look at some of the benefits smart business owners have realized with desktop solutions.
Substantially Fewer Errors
Payroll error stats are frightening.
Businesses that rely on Excel spreadsheets and calculators have an average of 15 errors every payroll period. Ouch.
And the fallout is significant:
According to Ernst & Young research, payroll mistakes cost companies $291 each, on average. 50% of employees go looking for new jobs if just two payroll mistakes occur.
Desktop software virtually eliminates these errors by automating calculations and double-checking the data before it’s too late.
Tremendous Amount of Time Saved
The Small Business & Entrepreneurship Council found that small business owners reported spending at least six hours per month processing payroll.
An entire day each month processing, perfecting, and problem-solving payroll is a luxury no business owner has.
Desktop software cuts the time it takes by the virtuality of its automated data entry, calculations, and report generation.
Increased Compliance
Tax laws and regulations are updated all the time. Staying on top of local, state, and federal requirements can be exhausting. Every payroll means scouring through government publications and tax calculators.
A good desktop payroll solution auto-updates tax tables and calculates everything for you, then automatically generates the forms you’ll need for year-end reports.
No more guessing or panicking to make sure everything is calculated correctly.
How to Implement Desktop Payroll Software
Ready to get started? Follow these six steps to ensure a smooth implementation process.
Step 1: Take Inventory of Current Payroll Operations
Before you even shop for software, you need to take inventory of your existing payroll process.
Ask yourself:
- How many employees do you have to pay?
- What is the payroll frequency?
- Are there unique payroll situations that must be accounted for such as commission and bonuses?
- What are the tax jurisdictions to consider?
This helps you weed out unnecessary options and focus on programs that can do everything you need.
Step 2: Select the Right Desktop Payroll Software
Now that you know what you need, it’s time to start shopping.
If your company is large, you might not have the luxury of time to go through all of your options. In this case, consulting with a payroll expert may be beneficial.
For smaller companies, or those that feel comfortable, there are great resources available online and you can install your software without a payroll expert.
Look for the following:
- Can it handle your company’s specific requirements? You already took an inventory.
- What are the features? Specifically the ones you know you need?
- Customer support. Will there be a live human to call? What are the support options?
Most providers offer free trials so take advantage of those to see which is the best fit for you.
Step 3: Prepare Employee Information
Make sure you have all of the relevant employee information before the day of installation. This includes:
- Full names
- Addresses
- Social Security numbers
- W-4 forms
- Pay rates
- Pay schedules
- Benefits deductions
This will make setting up employee accounts and inputting information much faster.
Step 4: Install and Set Up
Follow the software installation instructions carefully.
During the setup phase you will enter company information, set up pay schedules, and enter tax account numbers.
Make sure to double and triple check that all of this information is correct before you run the first payroll.
Step 5: Test Parallel
Here’s a crucial step that many companies skip…
Run your payroll through both your old process and the new software for at least one pay period.
If they both come out the same you can sleep well at night knowing everything is perfect and ready to go.
If not, you will have a better idea of where the problem is and how to fix it.
Step 6: Train Employees on the New System
Make sure that anyone involved with the payroll process is trained on the new system.
If there are any questions, it is better to have them before running payroll and risking a problem or losing time later.
Many software programs include tutorials and training documentation so make sure to take full advantage of those.
Top Features of Desktop Payroll Software
There are many great options for desktop payroll software. Certain features help separate the best programs from those that do not have all of the features you need.
Payroll software features that every business owner needs include:
- Automatic tax calculations and updates
- Direct deposit
- Support for multiple pay schedules
- Year-end forms (W-2s, 1099s, etc.)
- Data backup/recovery
Other great features to look for:
- Time tracking integration
- Employee self-service portals
- Customized reports
Implementation Mistakes to Avoid
It’s easy to blow it when installing new payroll software. Keep a lookout for these mistakes, and you’ll be fine.
Haste
Rushing the process during the setup is the number one way to cause future problems. It only takes a few extra minutes to make sure everything is entered and set up correctly. Take them.
Double and triple check:
- Tax rates
- Employee information
- Payroll cycles
Skipping Training
Assuming that software is “intuitive” enough for people to figure out is the next worst mistake.
Invest the time and money in having proper training done for those who will be using it. It will pay dividends down the line.
Backup, Backup, Backup
The problem with desktop software is that it stores data locally on your computer, or an internal server.
If your computer crashes, and you don’t have proper backup procedures in place, you can lose years of payroll history and more.
This is what the data backup and recovery option will help with so use it.
Updates
Software updates frequently contain important tax table changes and security patches.
Set up a schedule to check and install them at regular intervals.
This will prevent possible compliance issues and keep your system secure.
Wrapping Up
Desktop payroll software installation doesn’t need to be daunting.
With a little bit of effort, you can change payroll from a dreaded time-suck to a simple, pain-free process.
Here are the takeaways:
The time and money spent manually processing payroll each period can be cut down significantly by purchasing good desktop software.
This results in fewer errors, happier employees, and reduced IRS penalties.
Here are the steps again:
- Assess your current payroll needs
- Choose a software that can do everything you need
- Prepare employee information before installation day
- Install and set up carefully
- Run a parallel test before going live
- Train everyone who will use the system
Follow these steps and you will set yourself up for payroll success. No more dreading payroll.
