Payroll Software ROI: Is it Worth it?
As your company grows, HR tasks like managing people data, tracking time, and running payroll grow, too. The smallest companies can manage these tasks with spreadsheets, but at a certain point, you have to start considering help. And unless you’re thinking of outsourcing, you’re probably looking at HR software, with payroll built in or on the side. Those aren’t cheap additions to your company, so determining HR software and payroll software ROI is a major factor in your decision.
At BambooHR, we’re naturally big fans of HR software and payroll software, but today, we’re diving into the question: is payroll software worth it, for you?
Is Payroll Software Worth It?
We’d hate to spoil the surprise, but you probably know where we’re headed anyway. Yes, the ROI of payroll software is very likely worth it. But don’t worry, we have lots of evidence to back that up.
In a recent State of Payroll survey, we asked 500 respondents from small, medium, and large businesses what their biggest challenges were in running payroll. The top three answers were:
- Staying accurate and minimizing errors
- Juggling multiple job responsibilities
- Completing payroll on time
Here’s how payroll software can help you solve these three major pain points.
Inaccurate Data and Payroll Processing Errors
Payroll errors can be incredibly costly in terms of money and employee satisfaction. Some of the most common payroll errors you may encounter are:
- Misclassifying employees
- Miscalculating pay
- Missing payroll deadlines
- Neglecting to send out tax forms
- Failing to keep complete records
According to The Workforce Institute at Kronos, 82 million U.S. workers have experienced paycheck errors. And this is a huge problem because the study also found that 49 percent of workers will start looking for a job after only two problems with their paycheck. In addition to losing valuable employees, payroll inaccuracies and errors could cost your company thousands in overpayments, and missed payroll tax deadlines could have you paying late fees, penalties, or massive legal fees in the worst case scenario.
How Payroll Software Helps
Payroll software ROI comes in part from simply reducing payroll errors. Payroll software makes it easy to run reports, file taxes, distribute pay stubs, and more, and as a major bonus, if you have payroll software that syncs with your HR system, you can reduce or even eliminate the need for double entry—a big source of payroll mistakes. Having information like wages, hours, account numbers, and withholdings update automatically in both systems at once means you’re much less likely to enter a wrong number or accidentally change a date when entering payroll information.
Overwhelmed by Multiple Job Responsibilities
Many payroll professionals have a lot more on their plate than taxes and paychecks. Just some of the other tasks payroll managers reported being responsible for in our State of Payroll survey included:
- Employee relations and responsibilities
- Recruiting and hiring
- Training and development
- Benefits management
- Office management
- Performance reviews
- Onboarding and offboarding
- Executive assistant
- Legal and compliance
- Travel coordinating
- Culture initiatives
Payroll is incredibly important, but look again; everything else on this list is important, too. Running payroll without help takes a lot of time, which means other essential tasks can start to slip through the cracks. That means you don’t just have payroll errors to worry about—you also have to worry about another list of possible issues, all because you’re spending too much time on payroll.
How Payroll Software Helps
The right payroll software automates or simplifies many payroll tasks, leaving more time to focus on other crucial initiatives. A tool like TRAXPayroll can simplify your process down to just three easy steps, complete federal and state tax filing for you, give you exceptional customer support, and provide seamless integration with BambooHR, so you don’t have to worry about double entry.
Unable to Complete Payroll On Time
This is probably a direct result of the previous two pain points. It’s hard to complete payroll on time when you’re managing a complex process, trying to avoid or fix errors, and doing everything else on your to-do list. On top of that, creating reports can be a process so time-consuming that it ends up permanently on the backburner, leaving you unable to make strategic payroll decisions or communicate your own state of payroll to the organization.
How Payroll Software Helps
A good payroll software can take care of tasks like tax filing and overtime calculations making your payroll process a lot simpler and a lot quicker. And because payroll software includes reporting, rather than fighting the formulas in your spreadsheets or trying to figure it out manually, you can easily generate reports that help you predict labor costs and make data-driven decisions. (TRAXPayroll has over 100 built-in reports!)
Unless you’re just starting out with a few employees or you’ve grown to the point that you need a full-scale payroll department to deal with the complex nature of your business, the ROI of payroll software is absolutely worth it. And if you are, we hope you’ll forgive us for plugging our own solution here. We wouldn’t if we didn’t believe that TRAXPayroll will make your payroll process everything you want it to be—fast, easy, and accurate. With the world-class integration between TRAXPayroll and BambooHR you get:
- A single, trusted source of data so you feel confident that, when you make an update, the right data is automatically included in payroll.
- One system for employees, making it easy for your people to access all their payroll information, pay stubs, and direct deposit accounts in BambooHR.
- Single sign-on for admins so payroll admins only have to sign in once to access both BambooHR and TRAXPayroll.
- Hours saved on data entry by reducing the need for double entry and automated overtime calculation.
- Federal, state, and local tax filing all completed for you by TRAXPayroll.
- Data security you can trust with important measures like three-tier backup redundancy plan, advanced data encryption, continuous monitoring, and diversified data centers.