There is a certain procedure that you must follow in order to set up payroll system in a small business. You do not necessarily need to have a large company with hundreds of employees to think about having a payroll system. Whether the number of employees in your small business is one hundred or just one, there are several benefits of setting up a payroll system. For example, it can save you a lot of time, which you can use in more productive areas. It also streamlines everything and makes sure that you are fulfilling all your responsibilities as an employer. Besides that, it is also very important to note that every year many business owners are penalized by IRS for payroll errors. Therefore, having an efficient payroll system is crucial for the smooth operation of just any business – be it a small one or a big one. Following is a brief rundown on some of the basic steps that you need to follow.