What Is Accounting Software And How Does It Help My Business?
There is an abundance of advice about how to run a business more efficiently and with lower costs. One of the more popular pieces of advice is to use payroll software. The argument is that the labor hours necessary to produce each payroll are significant expenses to the company and automating as many of those processes as possible will have a positive impact on the balance sheet. Before investing in such software, it is important to understand what it is and how it can help a business.
At the most basic level, payroll accounting software is designed to automate many of the payroll activities. The main processes this software automates are the calculation of wages, taxes, benefits and any other additions or deductions applied to an individual's paycheck. Most of the software available will also generate the paychecks for convenient printing.
The full capabilities of accounting software can differ from version to version. This makes it very important for each company to evaluate the programs to ensure all the features necessary for their business are present. For instance, a construction company will need certified payroll reports. A restaurant, for example, may need payroll items for allocated tips and reported tips but not all software will make this important distinction.
Where the software resides can be another important consideration. Many companies that provide payroll accounting software will have installed versions and cloud versions available. Installed software resides on the computers in the business or their accountant's office. Cloud software is maintained by a third party on the Internet. The person responsible for payroll will log in to the software with a username and password just as they would with their online bank account.
The main advantage to using accounting software is reducing the number of labor hours necessary to produce payroll each week. Most of the savings come from the fact that most of the calculations are automated. All that is really necessary, in most cases, is to enter the number of hours each employee worked in a given pay period and the software will do the rest.
Another big advantage is the reporting accounting software can generate. This is especially important when it is time to report payroll taxes. Almost all software will generate reports which will contain the necessary information to fill in the government forms and some will even complete the form and provide a printable copy.