Do you want a powerful payroll system that you can control but that doesn’t cost a fortune to run?
There is something every single business owner fears, or at least hates, and that is payroll. It’s just a number-crunching machine to many of us and one mistake, one overlooked rule, one late tax payment can make our lives a living hell.
Business owners often believe that to manage their payroll function correctly they need to purchase the big, expensive HR suites that try and do it all. The fact is that stand-alone payroll software can provide everything you need and in many ways, be the better choice.
Without a great payroll software in place, you are leaving yourself wide open to risk.
In 2023, 62% of all businesses used payroll systems, and this is increasing all the time. The fact is that you can purchase systems that provide professional quality results but without all the expense and overheads of a huge integrated system.
Stand-alone payroll software is designed for those that want all the functionality required to run payroll, but without all the features and extras of a fully loaded HR platform.
Whether you are looking for information on independent payroll software options or just want to understand the ins and outs of these systems, then this guide is going to provide you with everything you need to know.
In this guide, you will discover:
- What is Stand-Alone Payroll Software?
- Must-have Features
- Advanced Features
- Choosing the Right System for Your Business
What is Stand-Alone Payroll Software?
Stand-alone payroll software is as it states on the tin. A payroll system that does just payroll and nothing else.
We’ve all heard the complaints about some of the so-called comprehensive HR systems and how they crash all the time, how one change causes problems elsewhere, and how they are impossible to use.
In contrast to those clunky HR suites, the whole point of stand-alone systems is that they are lean and efficient. You get all the tools that you need for running payroll, but nothing else.
Imagine if you went to buy a new car. You could opt for a massive 4×4 vehicle with all the bells and whistles, or you could go for the basic model and strip out all the unnecessary features. Yes, the big vehicle may be more impressive, but it will be slower, more expensive to run, and far more trouble to maintain.
Think of stand-alone payroll software the same way.
The main difference is that stand-alone payroll software will often also integrate seamlessly with your current accounting software and time tracking systems.
Must-have Features
Ok, let’s be honest here.
Any payroll software provider can churn out a list of features that sounds like War and Peace. However, the reality is that when it comes to stand-alone payroll software there really are only a few key features you must have.
Automated Tax Calculations & Filing
This is a no-brainer and the software you choose absolutely must provide:
- Federal, state, and local tax calculations
- Automatic generation of tax forms (W-2, 1099s, etc.)
- Electronic tax filing and payments
The software should automatically be kept up-to-date with the latest tax laws so you never have to worry about compliance.
Direct Deposit & Payment Options
Physical cheques are a thing of the past. Your system needs to include:
- Direct deposit for employees
- ACH payments for contractors
- Pay card options for unbanked employees
Employee Self-Service Portal
If you think your employees won’t want a portal then guess again. Features to look for include:
- Pay stub access
- Tax form downloads
- Update personal information
Advanced Features
As your business expands so too will your payroll processing requirements. Good stand-alone payroll software will be flexible and scale with your business. Some of the advanced features you may require include:
Multi-State Compliance
If you have employees in different states, you will need software that supports:
- State-specific tax requirements
- Multi-state reporting
- Local ordinance compliance
Security & Compliance
Payroll data is sensitive. Essential security features include:
- 256-bit SSL encryption
- Multi-factor authentication
- FLSA compliance tracking
- ACA reporting
Choosing the Right System
With so many options available, choosing the right stand-alone payroll software for your business can seem like an impossible task.
However, if you want a system that is right for your specific business then here is a method used many times over the years to guarantee success.
Define Your Requirements
Before you look at any software, sit down and work out what you need including:
- Number of employees
- Pay frequencies
- States where you have employees
- Current systems you need to integrate with
Test The User Experience
The best system with all the features in the world won’t mean a thing if it’s hard to use. Look for:
- Intuitive interface design
- Clear navigation
- Minimal clicks to complete tasks
Evaluate Support Options
When payroll fails, you need answers. Make sure your provider has:
- Phone support during payroll processing
- Live chat for quick questions
Common Pitfalls to Avoid
Believe it or not, time and time again the same pitfalls and mistakes are made by businesses when selecting their payroll software.
The first is that the cheapest option is not always the best option. When you have a payroll query at 4pm on a Friday and you cannot get through to anyone for support then free support does not cut it.
Another problem is integration issues. Make sure your stand-alone payroll software will work well with your existing systems. Lack of integration equals manual data entry equals mistakes.
The last point is growth. Purchase a system that can easily scale up to at least twice your current employee count. Changing payroll systems is a real pain and not something you want to repeat.
In Conclusion
Stand-alone payroll software is often the best option for business owners that want to maintain full control of their payroll function and that do not want to pay the huge monthly fees for all-in-one HR suites.
The trick is to make sure you balance robust features with usability. Just because a system has 100 different bells and whistles doesn’t mean they are all any good or that they are the right ones for your business.
The best payroll software becomes invisible to your business operations, it just works, every time, without hassle or drama. That is the kind of reliability that you need when it comes to payroll.
Not only that but stand-alone payroll software is often the most cost-effective option but most of all it’s a system that does one thing, and does that one thing well. When companies focus on doing one thing, they tend to be really good at it.
Make the smart choice and select a stand-alone payroll software that will work as hard for you and your business as you do.
