What Is an Online Payroll System?

The Milestone Team December 6, 2022
What Is an Online Payroll System?

An online payroll system is a software solution for managing, maintaining, and automating payroll services. In addition to maintaining compliance with tax laws and other financial regulations, integrated payroll software can be beneficial for businesses of all sizes. Business owners can spend more time planning, budgeting, and taking other business-forward steps when they are freed from tedious and difficult payroll tasks.

What Is an Online Payroll System?

An online payroll system integrates with other core business systems to ensure that employees receive accurate, on-time compensation in the appropriate manner. Personal information, payment preferences, and other details can generally be edited by employees using the software. This allows you to customize the system to suit all of your employees’ needs.

Managing and automating payroll payments for all types of employees, including salaried and hourly employees, at different locations around the world, requires payroll systems that are reliable, easy to configure, and flexible. The payroll system should simplify tasks, making it easier for employees to maintain compliance with tax laws and other financial regulations, as well as manage complex rules, payroll flows, and checklists.

As well as allowing employees access to their payment history, employee portals provide an easy way for them to adjust their personal information and their payment preferences. This simplifies the process of managing their payments. As a result, they can get quick answers to their questions.

What Makes a Good Payroll System?

Payroll software should have a simple, consistent, and secure interface that can be accessed from a variety of devices by employees and payroll staff.

Admins should be able to set up the online payroll system without needing to code or contact IT professionals. Additionally, it should include recommended formulas and best practices. This will guide employees through a few simple steps to configure the system according to their specific needs.

In addition to integrating business intelligence and reporting features, payroll software should simplify talent management, budgeting, and other strategic processes. It is increasingly essential for payroll systems to provide deep visibility and support for business intelligence as mergers and acquisitions, contract workers, and one-off projects become more common.

Most importantly, organizations must ensure that their payroll system protects sensitive data from accidental and intentional attacks, whether within or outside the organization. Employees and payroll administrators should have access to only the information they need, to protect personal information. 

How to Pick the Best Online Payroll Software?

One of the most critical aspects of your business is your employees. Picking the best online payroll software is critical to ensuring the health and success of your business.

As one of the most significant parts of your company’s finances, your payroll system plays an instrumental role. It is imperative to ensure that your employees are properly compensated for the work they do. This also ensures that compliance with governmental regulations is maintained, and that your internal financial processes are as efficient as possible.

Typically, there are 4 different types of payroll systems, and each of them may suit your organization’s needs in different ways.

In-House Payroll

Small businesses with a limited number of employees, who have consistent work hours from week to week, are often the most suitable candidates for in-house payroll solutions.

For an in-house payroll system:

  • Payroll is completed by an employee within the company
  • The calculation of payroll is done either manually or by using a stand-alone payroll system.
  • The payroll has a limited amount of irregularities and complexity.

Individual Expert Managed Payroll

Traditionally, when a company doesn’t have the expertise among its staff to complete the payroll process, or when the payroll needs exceed the capacity of current staff, the company hires an Individual who is an expert on payroll services, such as a bookkeeper or a CPA. A CPA, or Certified Public Accountant, is a trusted financial advisor who helps individuals, businesses, and other organizations plan and reach their financial goals.

Payroll systems managed by bookkeepers or CPAs include several features, such as:

  • Payroll is processed by an outside bookkeeper or CPA who is specialized in payroll administration.
  • There is a payroll software system that the bookkeeper or CPA uses to complete payroll.
  • A big task is taken off the shoulders of current employees, saving them time.

Outsourced Payroll

A company that does outsourced payroll will take responsibility for managing and processing a company’s payroll. This takes the burden off of the company completely. 

An outsourced payroll system has a few distinguishing features, such as:

  • Outsourced payroll will hire experts in payroll who bring a high level of expertise from their company to yours.
  • The outsourced payroll company will have expertise on all of the nuances of payroll, making mistakes or noncompliance highly unlikely. 

Software Managed Payroll

The last option in the world of payroll management is to use a software-managed solution. The popularity of these computerized payroll systems is growing, due to the fact that they are cloud-based, are automatically updated with the most recent information, and are available 24/7. Gusto and Rippling are good examples of payroll management software.

There are several features of a software-managed payroll system, such as:

  • Cloud-based and accessible anywhere, anytime.
  • Processes payroll data automatically based on employee records and other information input into the system.

How Milestone Can Help You Tackle Payroll

As far as payroll processing is concerned, there is no room for error. Noncompliance with laws and regulations can be costly. Additionally, an employee’s experience is vital to the success of the company, and timeliness and accuracy are essential. You can be assured that our payroll management services team will use the right tools and design the right process to ensure your success. Contact Milestone today to begin simplifying payroll for your small business.

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