Make payroll a breeze: How to optimize your payroll process with automation

Luis Gonzalez
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Make payroll a breeze: How to optimize your payroll process with automation

Whether you’re a small business with a handful of employees or a large corporation, payroll automation can simplify one of the most important parts of your company: paying your employees. But it’s especially helpful If you’re too small or early to have a dedicated finance team. 


Rather than relying on yourself to complete manual payroll as a business owner, payroll automation can help ensure that your employees get paid in a timely and accurate manner, all in less time and with reduced error.


While automation is key to improving your payroll structure, it’s also the future of finance as a whole—not just for payroll: think accounting automation, automated vendor management and more. If you want automation to play an integral part in your business, automated payroll is a great place to start.

What is payroll automation?

Payroll is the process of paying employees, which consists of calculating earnings and withholdings for taxes and employee benefits. Payroll also may include business records like the distribution of paychecks and employee wages. While important, this can be a costly and time-consuming process. This is where automation plays a huge role.


Payroll automation streamlines payroll processing by aiding in tasks from calculating tax withholdings and filing taxes to creating payroll reports and handling direct deposits. These tools for finance teams can help save both time and money, especially around tax season.

Why you should use payroll automation

Of course, saving time and money by setting up an automated payroll system will in and of itself take resources to implement. Digital adoption can take time upfront to learn and train employees on how to use the new payroll software, but the upfront investment is worthwhile in the long run because of the amount of time you’ll save with the overall efficiency of the product. Here’s a look at the many benefits of payroll automation:


More efficient and cost-effective


If you’ve done payroll by hand you know how time consuming it can be. An automated payroll system allows you and your employees to focus on growing your business and other important tasks. By saving time, you’ll save money.


Lowers the chance of human error


An automated payroll system limits the likelihood of human error from manual data entry by using technology that does the work of calculating figures like deductions and overtime rates for you, thus ensuring your employees get paid on time and accurately. Not to mention they’ll be able to access their financial information when and where they want with a user-friendly system.


Keeps you compliant


Human error can not only upset your employees if they’re not getting paid correctly but also can potentially bring you legal trouble. An automated payroll system can help you stay in line with IRS tax laws and regulations by generating reports, like profit and loss statements, that you’ll need come tax time.


Limits the number of employees you’ll need to hire


If you’re a small business that can’t afford to bring on a full-fledged finance team, payroll automation means you can work with a smaller team, which allows you to save money by not paying more employees. You can also keep your payroll services in-house and avoid the need to outsource your finances to a third-party provider.

What to look for in payroll automation

Everyone company will have different priorities for what they’re looking for in an automated payroll system, but these are some features that are important across the board:


  • Employee data management and self-service options
  • Tax filing at the state, local and federal levels
  • PTO tracking capabilities
  • Same-day direct deposit
  • Time tracking
  • Software integrations
  • 24/7 support when you need it

How to implement payroll automation

Once you decide to make the move to an automated payroll system, you want to make sure you’re going about the switch the right way. Here are four simple steps to making the switch to automated payroll:

Find a payroll system that works for you


Not all automated payroll systems are created equally. You want to make sure you select the best product for your individual business needs based on the size of your company and other factors. For example, you may specifically want an accounting software for small businesses if it’s just you and a few employees. Questions you may want to ask yourself while searching for the right payroll management tool include:


  • Will this payroll software save me time and money?
  • Will this tool work with my current HR software?
  • Wil this payroll provider work for the size of my business?
  • Can this payroll management tool work with a growing business?
  • Does this payroll solution fit within my budgetary constraints?

Input your information into the system


Your payroll system is only as good as the information you give it. Make sure you plug in all of your payroll data and information correctly the first time around to avoid any errors in the future.

Ensure that you have the necessary documents and processes in place before launching


Get your tax forms and documents (EIN, I-9, W-4) ready and make sure your employees are aware of the switch to a new system before you roll it out.

Train any employees who will need to use the automated payroll system


Give your employees ample time to learn the new system, whether you’re doing a self-run training or enlisting an outside source to run a training session. The American Payroll Association is a good place to turn if you’re considering outsourcing training. If you choose the right product, though, you should have a smooth and successful transition, with or without outsourced training.

Make payroll easier with finance automation


Payroll is a necessary function for any organization. If your employees aren’t getting paid on time and accurately, they’re not going to be too happy and probably won’t stick around for long. It’s crucial that businesses stay on top of payroll, but without automation, that can be a challenge. So consider switching to a system that allows for same-day direct deposit, data management, and around the clock support to help streamline your payroll and keep everyone happy, including yourself. 



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