2019 Review of Professional Payroll Systems

For years, every other Friday, when paychecks were disbursed, co-workers would line up outside my office, thankfully not for me, but for our staff payroll person, whose office was down the hall from mine. It never failed, not a payday went by without the line appearing. Some weeks it was just a few people, other times the line curled around the corner. Many of the concerns were legitimate; hours worked that didn’t appear on their check, or overtime miscalculated or even missing. But others were asking for explanations of deductions (why is my health insurance so much?), while a few wanted to know why their vacation time was so low, or why they didn’t have any PTO left. The bottom line is that while other departments can make data entry mistakes and correct them with no repercussion, a payroll mistake will result in long lines and will require an immediate explanation.  

Today, payroll departments have the added responsibility of paying both employees and contractors: some hourly, some salaried, some a flat fee. Deductions need to be entered and managed including standard deductions such as federal and state taxes along with a long list of voluntary deductions such as health insurance, life insurance, accident insurance, and supplemental insurance, along with retirement plan deductions, stock purchase deductions, HSA deductions, and a whole bunch more. Not only do these items need to be deducted properly from an employee’s gross pay, they also need to be paid to someone, such as an insurance company, a financial management company, the IRS, and other appropriate tax authorities. If that isn’t enough, the payroll department is also responsible for tracking employee sick time, vacation time, comp time, and PTO. Payroll staff needs to be sure that employees are paid properly if they work overtime, and it is the responsibility of the payroll department to ensure that neither the employee or the company is abusing federal labor laws.

Which is why more businesses are looking for one of two things: a payroll software that simplifies the entire process, or an accounting firm that offers payroll processing. But how do you know which payroll application is best for your needs, whether those needs be to enable your client to process payroll, or for your firm to offer payroll processing for your client?