As an accountant, you know that processing payroll can be tedious and time-consuming. Regardless, it is an essential aspect of your human resources, as people who don't get paid typically don't go to work. Modern payroll software and the automation it offers can greatly simplify the work of accountants.
We will provide you with some statistics and real-world examples to help convince you. By the end of this article, you'll have a solid list of reasons why you should consider adding payroll software for accounting.
What is payroll accounting?
Payroll accounting is the process of documenting employee compensation. Proper tracking is necessary to remain federally compliant and ensure your employees receive the correct payments.
Years ago, payroll accounting was handled by large-scale departments. Thanks to tech disruption, many large organizations are outperformed by small-scale operations that know how to offer specialized services.
With this in mind, large-scale companies hire payroll clerks to collect the data and produce reports. Despite the fact they still need specific financial departments, large companies still have a need for automated software. So both large firms and small firms can benefit from the addition.
Despite the additional cost, automated services usually save money. This automation allows large and small firms to avoid hiring for positions that a computer can fill. As a business owner in the modern era, saving money is vital.
What is payroll software for accountants?
Payroll software for accountants replaces many of the functions a payroll department performs. Good software provides the following benefits:
- Automated payout of an employee's owed amounts (based on salary, overtime, or freelance fees)
- Real-time payroll reporting
- Online availability of pay stubs and tax forms
- Online and remote access of data
- Accessible tracking features for compliance
- A way to break down payroll information by multiple locations
Often payroll software is one aspect of total workforce management and HR services. The combined resources enable users to offer a technology-based approach to people management.
Of course, payroll software isn't always a complete offering. Some offer specialized services, so you need to read each software's offering before trying them out.
Why should accountants consider using payroll software for accountants?
Accountants already have the numerical and financial skills needed to handle payroll — but boy is it a repetitive and data-driven task! Those who run accounting firms understand that their skills are better used for complex accounting issues.
Automated payroll software helps with these primary areas:
- Tax compliance
- Hands-off automation
- Employee information
For more examples as to why a fully-integrated payroll application can help your business, here are ten of the best reasons you should consider it:
1 - Payroll software for accountants makes things easy.
Regardless of the industry you work in, providing good automation to a process makes it more accessible. A quote from author Anthony J Steiber illustrates this beautifully:
"Any daily work task that takes five minutes will cost over 20 hours a year or over half of a work week. Even if it takes 20 hours to automate that daily 5-minute task, the automation will break even in a year."
Anyone who has had to do manual payroll accounting understands how long and tedious it is. For those who support massive workforces, the repetitiveness of this task can lead to madness.
Going back to payroll software, the point isn't to eliminate the human element. The point is to automate the most repetitive tasks. Good payroll software for accountants does the following:
- Collects accurate staff payment information based on what you input
- Flexible wage tracking (differing between freelance, part-time, and full-time employees)
- Automatic tax deductions
2 - Payroll tax deductions and remittances are done for you.
Automation is incredibly helpful when taking advantage of taxes. The repetitive task of payroll tax deduction is evidence of this. Calculating tax remittances is a redundant (but necessary) process.
Payroll taxes include the following:
- Social security
- Unemployment taxes
- Provincial or state taxes
Knowing the cut-off points for what percentages are taken is necessary for compliance. Those percentages are different depending on what your employees make.
Payroll remittance is another mandatory tax aspect, as failure to withhold the proper amount can lead to significant penalties. This doesn't account for lateness, yet another layer of payouts you need to be aware of.
Having tax software to do both for you means two significant headaches have been removed from your plate. Not all tax software is created equal — only some (Push Operations for one) do this calculation for you. So, if this is an issue you've had to deal with before, be sure to be picky about what software you choose.
General bookkeeping software doesn't always provide automated features. Without the automatic tax deductions, you are likely losing the money you could be earning elsewhere.
3 - There is less room for error.
Taxes are not an area you want to be making errors in. A big part of payroll accounting is taking out taxes and mistakes can be costly.
All you need to do is look at eyewitness testimony for an example of human error. Studies on eyewitness testimonies show that only about half of them are accurate. It is a stark reminder that human error can lead to unfortunate legal intervention.
It's fair to say that trying to identify a person through the chaos is far more challenging. However, human error happens anywhere, while machines are far more effective at avoiding these issues.
But automation is not perfect, so payroll software for accountants goes through multiple layers. Staff-approved hours confirmed by a computer and approved by a manager give more potential to correct payroll issues.
4 - Payroll software integration is a big plus.
When it comes to having a complete tax reporting and financial system, there is a lot of software on the market. For example, a restaurant uses POS software, inventory tracking tools, time tracking, scheduling, and (of course) payroll calculation tools.
If your system does not integrate existing tools, it will take extra steps to address inconsistencies. Accountant-specific tools also cover a wide range of needs. It would help if you had software that integrates with a wide range of applications.
For example, Push Operations integrates with Xero Accounting. The software automatically merges the creation of journal items, balancing credits with debits, and billing aspects.
This fact brings up an important aspect: how does your accounting software integrate with other platforms? If it doesn't do this well, you might consider alternative options.
Quickly translating information between different software packages is a big part of being a business owner. Integrating payroll, tax software, and accounting software can create a complete system.
5 - Automated payroll accounting improves your expansion potential.
Automation can save up to 75% on your business costs. This figure mainly refers to basic automation, the process of taking high-volume tasks and placing them into the hands of computers. Saving money can easily translate to other important business growth activities.
Your scalability improves with taking high-volume tasks and translating them into simple automation. Managing multiple locations with remote access is necessary to transform your business into a process.
Creating processes is what differentiates small accounting firms from larger providers. Alongside your existing accounting program, improving scalability across all fronts is crucial as a business provider.
Great business examples include Constant Contact, which uses marketing automation to simplify its business. Companies that do not use automation are often left behind in favor of more competitive alternatives.
6 - It is easy to produce a digital paper trail.
Financial reporting is an essential aspect of managing any business. A lack of proper financial tracking makes you fiscally non-compliant.
Eventually, the IRS will find this out and discover inconsistencies in your reported data. This issue will bring you to a tax audit, which results in the IRS scrutinizing your business transactions. Suddenly financial tracking becomes incredibly important.
An automated payroll system will turn much of this into readily available information. Rather than digging through old files, you submit records based on a computerized system.
IRS audits suddenly become incredibly simple, reducing the risk you take from everyday issues. Knowing that these high-volume tasks are in the hands of a system that doesn't suffer from human error means you don't have to worry.
7 - Real time tracking is a game changer
Real-time access to financial data is comforting. This capability allows you to isolate problems in your system. Access to regular reports at any time helps solve many everyday situations. During an audit, quick response times and easy-to-access data are a necessity.
In one high-profile situation, Plug Power, a renewable energy company, disclosed it could not provide a proper accounting of its financial condition. Federal lawsuits have been brought against the company showing higher-than-expected earnings. Stock prices have also plummeted as a result.
While not specific to accounting, this displays the importance of tracking your financial information. Not knowing the situation, we can't comment. However, using activity trackers to find your financial information is crucial.
8 - Quick online access for you and your employees.
Payroll software for accountants provides a dual-sided approach to tracking financial data. Employees (especially new hires) will often ask these payroll questions:
- Did I receive holiday/overtime pay?
- Can you get a pay stub for me?
- I feel like my paycheck is a bit short, can you check?
- Can you get me this tax form?
- Did I receive a raise?
Having employees call in about how much they earned or requesting paystub information is a waste of your time. The time spent getting the file for your employees is better spent doing something worthwhile. Using a payroll service enables you to address these questions without direct intervention.
Because everything is automated, the employee payroll request is off the plate during tax season. When employees call for tax forms or pay stubs, having online availability will allow both of you to get through problems faster.
9 - It is easy to stay federally compliant.
Federal regulations are tricky, whether working with employees or acting as a business owner. For example, naming all the tax forms is a complicated mess:
More than a few people have mixed up W-2s and 4s, leading to confusion. Regardless, you have better things to worry about. Not worrying about your taxes is a big part of working with payroll service providers.
The payroll software solution is to take this out of the hands of human payroll services (who have a higher chance of making mistakes). So, using payroll applications enables you to stay federally compliant with minimal effort.
Outside of the more extreme tax audits, automating your reporting makes it easier to fill in federal requirements. Having access to tax forms is essential in cases where you need to create reports.
Having this information readily available during the employee onboarding process is great for both sides. Even when hiring more people, save yourself time by using automated services.
10 - You can outpace your competitors.
Automation is one way to gain a competitive advantage, allowing you to outpace others in your market. Automation applies to all forms of outdoing the competition:
- Customer Relationship Management
- Product Management
You'd be hard-pressed to find an aspect of your business that cannot improve through automation. When working in accounting (a very data-driven industry), almost all elements are affected by automation.
Companies that fail to provide more automated services often fall behind. So, even if you live in a small town that discourages automation, the proof comes from your ability to do it better than others.
What is the best payroll software for accountants?
The best software for accountants is Push Operations. As a full-service provider, we handle all aspects of your business:
- Time tracking
- Regular reports
Push Operations ticks all the boxes in the ten best reasons for a company to choose payroll software for accounting.. Integrating your business with what we offer can help you increase your productivity and growth. Contact us today to find out how Push Operations can provide you with the best payroll software for accountants.