Paperless Payroll FAQ

Updated: April 30, 2009

What is a payroll system?

Payroll systems are software applications that help automate the payroll process and allow it to become paperless. They can exist as stand-alone solutions or integrate with accounting, talent management or other HR functions. The system you need will depend on the size of your business and how many different types of workers you have — such as full-time staff, part-time employees or contractors — and how much you want to integrate and customize the solution.

What can a payroll system do?

Payroll is more than issuing a check every two weeks — it's also a system requiring detailed record-keeping and accounting that must comply with a bevy of state and federal laws. Applications can help you keep track of tax deadlines, meet compliance regulations, determine the status of your employees, and streamline the process of collecting time sheets and making payments.

Specifically, a payroll system can help you address:

  • Time and attendance tracking
  • Employee invoice and time sheet submission
  • Payroll processing
  • Payments — check writing and direct deposit
  • Tax forms and filing

What other systems can be integrated with payroll systems?

Often, payroll systems are just one module in a larger HRIS (Human Resources Information System) or HRMS (Human Resources Management System). Integrating payroll with accounting or other software applications can simplify the overall HR process because it lets HR professionals see more information at a glance, print more comprehensive reports or perform other basic functions without the need to maintain multiple databases.

Many companies use an outsourced service or solution if they don't want to maintain a payroll server in-house, saving staff the time and hassle of doing the work themselves.

In midsize or larger organizations, payroll and other HR modules may also be combined in a broader ERP (Enterprise Resource Planning) solution. ERP software brings together software from multiple departments, which might range from accounting to the contact center to the manufacturing department. These organizationwide solutions might incorporate features that help employees directly, such as letting them access their payroll history and benefits information from their desktop.

What payroll software can I use in-house?

You can start by comparing offerings of larger companies such as ADP Inc ., Intuit Inc ., Oracle Corp ., Paychex Inc ., Sage Software Inc . and SAP Aktiengesellschaft . Keep in mind that many smaller vendors offer excellent products. If you're not sure an in-house system is right for your company, consider the other options below.

Is open-source software an option?

If you want to run your system in-house but don't have much money to spend, an open-source solution might be an option for you. However, many open-source systems require a lot of configuration up-front to make them run effectively. This takes both the time and expertise of a dedicated payroll professional. You can check out , an open-source project, to find software applications that are freely available.

If you don't have a payroll person on staff, you might want to find another option. If you update your business's accounting software, such as Intuit's QuickBooks or Sage Software's Peachtree, you can make use of payroll information the software includes. Otherwise, you might want to consider outsourcing some or all your payroll processes to a third-party vendor.

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