How should a small business go about choosing the most suitable payroll software? To begin, ask yourself if you actually require or desire to have true payroll software or if it would be more beneficial for you to outsource the processing of your payroll to a payroll provider. Both approaches have their advantages and disadvantages. Here are a few examples of them:
The Benefits of Outsourcing Your Payroll:
- There is no requirement to purchase software, keep it updated, or learn how to use it.
- You won’t have to worry about your taxes if you use a service that guarantees they’ll be filed and paid on time and accurately as long as you hand over the cash when they ask for it.
Negative Aspects of Outsourcing Payroll
Some negative aspects of outsourcing payroll include:
- In most cases, you are required to pay the payroll provider for taxes at the time of the payment date, even though the taxes aren’t actually due to the taxing authority for many weeks or even months.
- The price: these services often charge a monthly fee in addition to an additional fee for each employee, in addition to other expenses that may be applicable at times.
Benefits of Employer-Side Payroll Software:
- Complete and Total Control: When you handle your company’s payroll in-house, you have complete and total control over the procedure. You are able to make modifications at the very last minute, add specific customizations, or do anything else you could want, and you are aware of precisely what occurred when it occurred and why it occurred.
- Cost – The cost to buy and use payroll processing software yourself in-house is typically less overall than the monthly fees charged by the outsourcers, and the requirement to pay everything up front to the service can put a crimp in your cash flow for some businesses. Additionally, the monthly fees charged by the outsourcers are typically higher than the fees charged by the in-house payroll processing software.
Payroll Software’s Drawbacks
The disadvantages of using payroll software include the following:
- You will need to acquire the program, you may need to be involved in setting it up or customizing it, and either you or your staff will need to learn how to use it correctly.
- Responsibility; you are completely responsible for ensuring that everything is computed accurately and that the necessary paperwork is submitted on time. The majority of the time, the program simplifies the process quite a little, but the decision ultimately rests with you.
There is no one “best” answer to the problem of processing payroll; since the needs of businesses vary, determining the solution that is best suited for your company will depend on the specific demands and expectations of your company. If you are thinking about investing in payroll software, you should first assess the needs of your company, then investigate the various software packages available on the market to determine how well they meet those needs, and finally settle on the payroll application that works best for your organization.