Your company’s payroll plays an important role in the life of your business. If you can't pay your employees correctly and on time, it seriously impedes your ability to do business. And the government expects you to pay payroll taxes accurately and on time as well, and will fine you for problems that occur. Payroll can be further complicated by Social Security and Medicare deductions, state and local taxes, unemployment insurance, retirement plans, health insurance, and other payments. So while you may be able to neglect other areas of your bookkeeping from time to time, you can't afford to get behind on your payroll responsibilities.

While

some businesses prefer to outsource their payroll function to companies that specialize in that area, many business owners still prefer to process payroll internally. If you intend to handle your payroll yourself, you will find no shortage of payroll software programs that will make the task easier. Just as every business is different and unique, every payroll software program has different features and designs.

So how do you select the right payroll software package for your business? Find out as much information as you possibly can about the various software programs on the market. Ask associates and other business owners which programs they are using, and if they recommend them. When evaluating the various software programs, ask these questions to help ensure you select the right one:

1. Are the instructions written so that a novice will understand them and know exactly how to use the program? In other words, if you had to replace your payroll coordinator, would the new person be able to take over quickly?
2. Are the menu options readily available on each screen, and displayed in a logical sequence for ease of use?
3. Is the program flexible? Can you change data that has already been processed? Can you change such things as withholding rates, or do you have to pay an outside vendor to make those changes?
4. Will the payroll software work with your other business software programs for accounting and management needs? Will it allow you to import and export data easily and quickly?
5. Does the software have security features, such as passwords or user identification codes? Can it prevent unauthorized access to private information?
6. What tech support options are offered? Does the software company have a good track record?
7. How long has the software been around? Have new versions been released recently? Beware brand-new programs; many software programs are released with bugs and other problems.
8. Will the program scale as your business grows, or are there limitations in the program?
9. How long has the company been in business? Have there been any complaints against the company? What do other users of the program have to say about it?
10. Does the program offer a 30-day trail option? Many companies will allow you to test-drive their software to make sure it meets your needs.

When you find a software package that fits your company’s needs and price range, then go for it. But before you buy it, make sure that the employees who will be using the program have ample opportunity to offer input and concerns. And as your business continues to grow, make sure that your payroll software program can grow with it.