An online payroll solution can save businesses money. It can reduce costs by automating payroll processing, reducing mathematical errors, and avoiding compliance penalties and fines. It also allows HR staff to focus on other critical revenue-generating tasks. This can be hard to quantify regarding ROI, but consider the value of improved productivity as a soft cost.
Time Savings
Running a small business isn’t easy, and when it comes to payroll, managing the process can feel like a full-time job. Whether handling payroll or delegating the task to an accountant, bookkeeper, or another employee, the process can quickly add up and divert time from other revenue-generating activities. Online payroll services can eliminate this hassle, allowing you to return to critical tasks that grow your restaurant business.
With the best online payroll software, an automated system automatically handles everyday salary tasks like wage and tax calculations, direct deposit preparation, payroll tax filings, etc. This helps to free up 2-5 hours each pay period, enabling you and your employees to focus on sales, operations, and customer growth that generate more revenue.
Additionally, leveraging an online payroll service gives restaurants peace of mind that their tax filings and withholdings comply with applicable laws. Many of the best online payroll services stay updated with changes in tax regulations and labor laws, ensuring their systems are always accurate.
Finally, leveraging an online payroll service can help improve employee satisfaction by streamlining communication for payroll inquiries and giving employees instant access to their paystubs, reducing frustration and confusion. This transparency also fosters a sense of trust and can create a more positive work environment.
Accuracy
Payroll processing is a sensitive and highly confidential business operation. Employee personal and financial data must be processed correctly to avoid costly errors that could lead to identity theft, embezzlement, or other legal issues. A quality payroll provider will use redundant backups, multiple server locations, and state-of-the-art systems to protect their clients’ data from loss. They will also strongly focus on customer service and a reputation for transparency. In addition, using an online payroll system eliminates the possibility of human error. If you use a robust time tracking tool, for example, your employees can clock in or out via their smartphone or tablet, and geo-fencing will allow the system to record their location. This reduces buddy punching and other inaccurate attendance reporting and ensures the system records their work hours. This eliminates the potential for payroll mistakes that can cost your company valuable billable time and erode morale among your front-line staff.
If you calculate the amount of time your team spends on payroll processing, wrangling timesheets for hourly employees, or dealing with scheduling discrepancies and then convert that number into actual dollars per person, you’ll see that a solution like online payroll services can save you real money. Robust self-service functionality can also free up your internal team’s time to work on more pressing HR tasks such as compensation planning or ACA compliance.
Efficiency
An excellent online payroll service provides a single source of truth, decreasing the odds of data errors and making it easier to catch mistakes. Additionally, many of these services offer built-in features that reduce the risk of compliance failures (such as improper tax withholding or misclassification), which can lead to penalties and fines.
This can be a substantial cost-saving advantage, as these penalties can quickly add up to more than the initial investment in the payroll system. Additionally, these services can free up HR teams to focus on other revenue-generating tasks rather than laboriously processing payroll and timesheets.
Some payroll systems even offer advanced reporting functionality that enables users to generate customized reports on demand. These reports are generated in real-time, reducing the wait time and helping managers make quick decisions that improve ROI. In addition, some of these systems also come with built-in features that simplify benefits administration and workers’ compensation claims management. Some also include an employee self-service portal where employees can track their pay history, download payslips, submit proof of investments, declare their income taxes, and more. The pricing structure of these services varies, but most have tiered options that scale with the size of an organization’s workforce. Evaluate the different tiers before choosing a provider to ensure you’re not outgrowing your system too quickly.
Reporting
Depending on your chosen system, online payroll services can provide various reports that may save your business time. For example, some systems allow you to break down employee data by year, month, week, day, and hour. This can help you identify trends and pinpoint where your staff spends most of their time. It may also be helpful for restaurants that have seasonal sales fluctuations and need to know where their money is being spent.
For a more intangible but important benefit, look for a payroll system that provides robust employee self-service. This can save your HR and accounting departments the time it takes to resolve scheduling discrepancies, pay stub errors, and deduction problems. Complete self-service can also free up employees’ time for more critical tasks such as generating reports.
To calculate the cost savings of automated payroll, determine how much your accounting and HR department spends on processing payroll. Suppose your new system enables these employees to focus on more strategic or pressing elements of HR, such as compensation planning and ACA compliance. In that case, that’s an additional cost saving to factor in.
Then, use the number of hours saved per month by implementing your new payroll system to estimate your ROI. Be sure to include any other cost savings associated with the solution, such as reducing the headcount in your finance or HR department or enabling your team to work on revenue-generating activities.
