Payday is something every employee looks forward to. Having said that, it can be a tremendous source of stress for many small businesses and start-ups. The reason? Payday equals payroll, and payroll can be complicated. The fact is that many small business owners report spending between six to ten hours a month calculating payroll taxes. That’s over a handful of hours that could be dedicated towards other parts of your business, where you can make a more significant impact.

For those business owners who want to regain their time, there is a solution – payroll software. Payroll software will streamline your business processes and give you back hours in your work week. And yes, it may be an upfront expense, but it will enhance overall productivity and save your business money in the long run. Here are the top reasons you need payroll software.

Accuracy & Efficiency:

When you use payroll software, all the tax calculations, deductions, and compliance-related tasks are simplified. The software will self-generate and update tax rates and tax forms and prepare documents to facilitate timely filing. When your processes are automated, you reduce the risk of accruing penalties and errors, ultimately saving your company money.

Most payroll software companies offer cloud storage. So you can access your paperwork from anywhere and don’t need to worry about storage because it’s all in their cloud. This is an essential function for companies with remote employees or distribution teams since it gives everyone on the team access to what they need.

Salary:

Accurately calculating pay for employees or owners’ draw is essential when running payroll. This may seem straightforward, but how you pay yourself can be complicated when you’re a solopreneur or single-person start-up.

If your entity is an S Corp or a C Corp, you want to ensure you draw a reasonable salary. For instance, you are entitled to draw a reasonable salary, where reasonable is defined as the pay you would receive if you had this role in another company.

If you created an LLC, sole proprietorship, or partnership, your salary would be considered an owner’s draw. This means you are withdrawing money from a business account and transferring it to your personal account. An owner’s draw differs from a salary because it’s more flexible, meaning you can pay yourself how much you want whenever you like. This is helpful when you are just starting out, and cash flow fluctuates.

When you pay yourself via owner’s draw, you’re not taxed when you pull money out of your business. Rather, you pay taxes when you file your personal tax return. This is why using payroll software can help you. There is less room for error when you enter all the draws into the software, which is a bonus because when you pay yourself with an owner’s draw, you increase the likelihood of an IRS audit.

Employees:

You know that your business is heading in the right direction when you need to start onboarding employees. This is a sign of growth that many business owners look forward to, but most don’t realize all the tax implications of hiring employees or using subcontractors to grow your business.

Payroll software can help make this transition easier by creating new hire reports and filling out forms, such as I-9s, W2s, W4s, and 1099s. Many states require you to send in employee information, such as name, address, social security number, and hire date. Most payroll software has a form for this that gets sent to the appropriate agency with just the click of a key.

Security:

Cloud-based software is essential when it comes to payroll. It stores all private information, such as social security numbers, bank account details, and salary information. Keeping this information secure is crucial to protect employee privacy and prevent unauthorized access. Most payroll software has advanced security features like encryption, secure servers, and regularly scheduled data backups.

Analytics:

An important part of payroll management is generating accurate reports and gaining insight into payroll-related data. Most software offers comprehensive reporting and analytic features that give businesses a full view of tax summaries, payroll reports, and labor cost breakdowns. This is beneficial for identifying trends, allocating resources, and budgeting income and expenses.

Opus Virtual Offices:

Opus VO is a B2B provider that offers virtual office services such as live reception, a business address, digital mail sorting, call log, and more. When you want to invest more into your company than you do your rent, a virtual office is the way to go. This route will allow you to purchase things you need to run your business efficiently, such as payroll software. As a business owner, time is money, and payroll software can help save you valuable hours so you can focus on growing your business. When you’re ready to take your business to the next level and streamline your processes, choose a payroll software brand that works for you.