A business should have a payroll system to manage employee information, hours worked, benefits, and of course the most important thing is paying your employees and the government what they are owed. If you are looking for a payroll system for your business, the first thing you need to decide is whether you want an in-house payroll program or a payroll service.
If you have employees, your business should have a payroll system to manage employee information, hours worked, benefits, and of course the most important thing is paying your employees and the government what they are owed. If you are looking for a payroll system for your business, the first thing you need to decide is whether you want an in-house payroll program or a payroll service. Here are some tips to help you decide which system is right for you!
The number one reason people choose a payroll software system (in-house) is to gain and retain control over their payroll system. For example, making changes to reports in payroll software is faster and easier to do in-house, rather than giving someone else control to do so. It is typically much easier to make changes to your payroll when you have in-house payroll software. However, there are some payroll services that give you more control than others, so be sure you check into this if you are leaning toward a payroll service.
The cost can vary greatly between using payroll software and using a payroll service. There is no general rule of thumb you can use to be sure which one is less expensive for you! It all depends on how many employees you have, how many companies for which you manage payroll, whether you use direct deposit and electronic tax filing, and more. Therefore, add up your initial cost and ongoing costs for about five years. Take that and divide it by the number of employees, and that will give you a cost per employee for your payroll. This helps you to see in a meaningful way how much the payroll is really costing you. (Hint: if you need help in figuring out what your five year cost will be, ask the sales representative from each payroll software company or payroll service you speak with.)
The process of paying payroll taxes can be stressful and time-consuming, and that’s the main reason so many companies decide to use a payroll service. Not only do payroll tax calculations need to be accurate, but the payroll tax payments need to be made on time, or there are stiff penalties. A payroll service will typically offer the service of filing your payroll taxes for you, and may even provide a guarantee it will be done on time. This does take the pressure of you; however you will typically pay for this convenience. There are tools within many payroll software systems to be sure your payroll taxes are correct, and you can even file your taxes online. Such tools make the payroll tax filing process much faster and easier! No matter which payroll system you use, be sure it fits with your payroll tax filing needs, and the staff you have available to manage the whole process.
Businesses have so many accounting software and payroll system choices these days. Find the right one for your business, and payroll will be a much less stressful process!
Stephanie Elsen is the author of this article about payroll software and accounting software. She is a retired accounting college professor and consults at one of the big four accounting firms. During her free time she loves to travel and write about experience.