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Small Business Payroll Solutions

The Difference Between a Payroll Software and a Payroll Service

A payroll software is used when an employer wants to complete the payroll process internally. A payroll service is when the payroll process is outsourced to a third party company.

A software is often used when businesses feel they do not have the time or knowledge needed to deal with payroll taxes. Some factors to take into consideration when purchasing a payroll software include:

  • Affordability: The price of a payroll software is generally more cost-effective than paying a third party.
  • Control: Payroll is in the hands of the employer; a company does not have to rely on anyone else.
  • Accessibility: Many payroll software programs are available online, so employers can access the system from any location.
  • Security: Managing payroll internally eliminates the risk that comes with sending an employee’s personal information to an outside company.
  • Liability: Companies who choose to keep the payroll process in-house run the risk of forgetting tax payments or filling out tax documents correctly. Not only could these mistakes cost the company money, but it could also cost them their reputation if the errors are not caught in a timely manner.
  • Unexpected/Undisclosed Fees: While many software solutions offer customer support, it often comes at a price. Cancelling or upgrading the software system may cause a price increase as well.

If an employer chooses to outsource payroll to an external company, it is important to consider the following factors:

  • More Time: Outsourcing payroll frees up time for the employer since they do not have to deal with taxes; this includes researching tax updates and changes and filling out lengthy tax documents.
  • Avoid IRS Penalties: Filing taxes incorrectly or late can cost the employer a substantial amount of money; not having to worry about fines from the IRS is a huge selling point for employers.
  • Avoid Headaches: The uncertainty of whether the software is the most up-to-date version, along with the potential IT issues that come with a software is alleviated by using a payroll service.
  • Prevent Losing Payroll Knowledge: If an employer has one person in charge of completing payroll, they run the risk of losing that employee at any given time; if the employee leaves the company, finding someone else to take his or her place would be difficult to do in a timely fashion.
  • We provide both payroll software and full payroll services.

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Payroll Services

Payroll resources and accounting information for business.