Features Your Business’ Payroll System Needs to Have in 2021

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If you own a business, making use of an efficient and effective payroll system is always critical. However, as 2020 has proven, it may be more important than ever given the way businesses have had to adapt to the COVID-19 pandemic.

Thus, with 2021 well under way, you should set aside time to ensure your payroll system and software offer certain essential features and capabilities. Specifically, in 2021, your payroll system should include the following:

Convenient Time-tracking

Many businesses were suddenly forced to allow employees to work from home when the pandemic struck. Business owners across a range of industries report an intention to continue doing so even when it becomes possible to return to the office. Studies indicate allowing employees to work remotely does not have a negative impact on productivity in most cases. Additionally, reducing the need for substantial office space can help a business save money in the long run.

That said, depending on your pre-COVID-19 policies, allowing employees to work from home may have impacted the way you track how much time hourly employees actually spend working on their various projects. Having a payroll processing system with convenient and intuitive time-tracking features may therefore be essential if you plan on continuing with a remote work or hybrid model.

Accurate Reporting

Although the deadline to apply for Paycheck Protection Program loans was March 31 this year, because the deadline has been changed and extended several times, you may be able to continue seeking PPP loans in the future. Similar aid and relief options might also be available in the coming months.

These loans typically come with stipulations regarding how business owners may use the funds. In some instances, as is the case with PPP loans, business owners can qualify for loan forgiveness by proving they used the funds according to the limitations placed on them.

Specifically, they typically have to prove they genuinely spent a certain percentage of the funds on payroll. If you’re ever in a position to qualify for loan forgiveness, you’ll want to be sure your payroll system’s reporting is accurate, otherwise those involved in deciding whether you qualify may feel you haven’t provided sufficient proof you used the funds appropriately.

Expense Management

The importance of expense management features ties in with the importance of accurate reporting. With the passing of the recent COVID-19 relief bill, some business owners can now apply for grants that are similar to PPP loans, but allow them to use the funds for a wider range of operational expenses.

Depending on how you run your company, you may permit some employees to essentially use these funds on your behalf, as long as they are using them for the proper expenses. They may not be using them directly, but you could use the funds to reimburse employees for qualifying expenses and purchases. 

Regardless, if employees are sometimes handling such tasks, you’ll benefit greatly from working with a payroll system that boasts extensive and accurate expense management features. You need to be able to track expenses, automate reimbursements, pay employees efficiently, and simplify the approvals process if you trust your employees to make wise decisions when deciding what can and can’t be expensed.

Remember, even when a pandemic hasn’t impacted a business, everything from tax law changes to business growth can affect how you need to approach payroll. You should thus make a point of reviewing your payroll system every year to determine whether improvements need to be made.

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