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The Advantage of Payroll Automation for Small Businesses

31 Aug


You’ve probably heard the term automation before, but what about in the context of payroll processing? Automating your payroll processing will save valuable time and money, especially for small businesses that don’t have the resources to delegate in-house personnel to this task.

What Does Payroll Automation Do?

Automated payroll systems are software or a platform that performs the processing of payroll automatically, without much human involvement. From the standard calculations and deductions to garnishments and tips, or direct deposit, automated systems manage it all and simplify the process.

Payroll automation not only maintains and processes payroll data, but it also has features to allow timekeeping and tracking employee hours. This will account for any hourly employees and keep track of any overtime pay. Payroll automation also manages tax deductions through different tax codes input into the system. It will monitor the necessary taxes depending on where employees are located, apply those taxes to the employee’s wages, and remit payment to the appropriate government agency. 

Payroll automation software offers the ability to store important data as well. Tax documents like W-4s and W-2s are generally housed in the payroll system and employees can access their tax documents through their employee portal. Having a self-service employee portal allows employees to check on their pay stubs, tax documents, and change personal demographic details and direct deposit info. Many times, the employee self-service portal is where team members can enroll in benefits and retirement plans and request time off.

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What are the Benefits of Payroll Automation for Your Business?

Increased Efficiency and Reduced costs

Payroll automation creates increased efficiency by handling payroll processing in a fraction of the time it would take a member of your staff to complete it. Automated platforms can process multiple payrolls and complex payroll simultaneously and as your company grows, it will get more cumbersome for a staff member to continue to manage a larger payroll on time and effectively. Automating your payroll saves you the cost of hiring a full in-house payroll team and allows your staff to focus on more important tasks and projects.

Less Room for Error

With payroll automation, there is much less room for human error. Important data could be left out of the processing, or an incorrect deduction could be applied if someone is manually processing your payroll. With automation software, the technology calculates the right payroll amounts and deductions, reducing the chance of mistakes.

Improved Information Security

Payroll automation platforms offer a centralized location where employee data can be stored, such as tax documents, personal information, or important deductions. Only the employees and certain administrators have access to this data, making it more secure than keeping physical copies on file.

Improved Compliance

If you have employees working in separate states, different state and local tax deductions could be set up improperly or missed if payroll is being processed manually. The same applies if you are required to provide job costing reports for certain projects. A payroll automation platform sets up employee taxes correctly based on where they are located and where they are working, in compliance with state and local regulations. Most platforms will also provide detailed job costing reports and can process separate payrolls specifically for these special projects.

Detailed Reports

Payroll automation also provides many different reports for your needs. Whether you require a general payroll ledger, or a more detailed report, the software is able to pull the data you need and consolidate it into one report for your books. Some platforms may also integrate directly with your accounting software.

Not only can payroll automation save your business time and costs, but it will also help your business stay compliant, reduce errors, and improve efficiency. If you’re interested in finding out how to automate your payroll processing, VensureHR can help. We offer payroll solutions to fit every business and will get your payroll running smoothly and efficiently. Request a call with us to get started.


Datagraphic- Payroll Automation: What Are the Benefits?Ramp- Payroll Automation: How to Optimize Your Payroll Process

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