No matter how small your company, you need some form of payroll. With all the rules, regulations, and taxations, it’s a lot more difficult than cutting a few checks. While some brave souls may choose to take care of payroll themselves, it’s usually a lot easier to outsource. Here’s a look at the differences in using a payroll service versus payroll software.
Payroll Software Benefits
Payroll software are programs designed to automatically take care of the different aspects of payroll. You put in the time and they pop out a nice, neat check (or direct deposit). You can use them to set up how much an employee gets paid each week, how they are paid, keep up with scheduling and payment data, hold onto all of that for tax time, and even keep track of employee benefits or retirement packages.
The nice thing about payroll software is that you can provide certain employees special access (i.e. managers or leadership) which makes it fairly easy to track and store changes -- and even know who made those changes. In this age of technology, most of these programs come with remote access apps and other benefits, so you don’t even have to go into the office to take care of business.
Sticking with the same software for a long time also means you are likely to get help from the company that provides the program with things like updates (online programs often update automatically) and adding new aspects to the program as the company grows. There’s also no need to include an outside service in your employees personal affairs, so you don’t have to worry about sending off personal data, like social security numbers.
On the other hand, it can be difficult to get a handle on how the program works, which can means lots of hours training and that any mistakes are in your own hands. One of the biggest problems tends to be that companies don’t realize they are paying more than the product is worth -- so if you decide to go software, be sure to shop around. Additionally, some software includes a cancellation fee. Make sure to read the fine print, and know what you’re expecting from your software before you purchase it.
Payroll Service
Payroll services are a third party company that manage a company’s finances and make sure employees get paid appropriately, generally requiring no effort on your part. They even get your taxes ready to file, providing not only a payroll management service but a payroll tax service. The best part of a payroll service is this hands off aspect -- no business time is taken away to manage finances and paychecks.
A payroll service is often the most cost effective option for a small business. It is likely going to be more expensive than payroll software (although that depends on how much time and training is going to have to go into using the software). An important thing to considering when choosing between payroll management services and software is the other key business attributes that come along with the software. Many programs provide more than just the payroll portion of a business. If you’re looking only for accounting services, a payroll service may work great. But if you’re looking for something more encompassing to work with your payroll, you may find a payroll software amongst your necessities.
