IceHrm Looking for an HR software for Your Company?

Advantages and Disadvantages of Payroll Software Versus Services

  Reading Time:

The choice between payroll software and payroll services is a difficult decision that every business owner must face at some point. There are three main methods to perform payroll for the owner of a small business: manual, DIY software or payroll services. While manual is not recommended, payroll software and payroll services each have their own advantages and disadvantages, making your payroll method a personal business decision

Payroll Software Advantages

  • Control - You are in control of all the details of payroll, report generation and display, and employee and payroll tax payments
  • Cost - typically less than you would spend on payroll services
  • Save time - compared to manual payroll, the software saves you a lot of time
  • Security - when you're in control, it's less likely that someone will hack in and steal your payroll data
  • More data - You have easy access to all payroll data at all times

Payroll Software Disadvantages

  • Time - A scheduled payroll takes time. If you make a mistake, you can spend many hours trying to fix it
  • Staff - Running payroll takes time AND manpower. Depending on the size or complexity of your business, payroll accounting can require a lot of manpower
  • Errors - The accuracy of the company payroll cannot be guaranteed, leaving you at greater risk of IRS penalties
  • Up-front investment - Some payroll software comes at a high price. When evaluating the total cost, annual fees should also be considered
  • Learning curve - DIY software can be complex and the learning curve can be steep

Payroll Service Advantages

  • Time saving - You save a lot of time compared to manual methods and payroll software
  • Time saving for personnel - Payroll accounting gives employees more time to focus on other areas of your business
  • Cost Effective - Payroll services are cost effective for many companies after you add up the software costs and the personnel costs of running the software
  • Guaranteed Accuracy - Payroll services often guarantee the accuracy of their payroll processing, reducing your liability for errors

Payroll Service Disadvantages

  • Cost - Payroll services often cost more than methods of payroll software
  • Less nimble - You don't have access to as much data as you want and when you want
  • Less control - You sign up for a service with fixed offers
  • Expectation and reality of the service are not necessarily identical
  • Data security - Even if companies invest a lot of effort in data security, it is more at risk when outsourcing
  • Initial costs - Set-up costs for services can be expensive

You may also interested in: http://hrmsoftware.net/advantages-of-using-payroll-software/

Advantages of Using Payroll Software

Payroll software offers many different advantages - for the user, the employees and the company (of all sizes). This article looks at some of the most...

Best Free and Open Source HR Technology Solutions

Finding HR technology solutions can be a daunting (and expensive) process, a process that requires long hours of research and deep pockets. The most popular HR...

IceHrm.com   Looking for a HR App for your company? Try IceHrm, today.