Unless you’re an accountant, you didn’t get into business to spend all your time doing payroll. You need to spend your time running your. Yet payroll activities are critical to your business. After all, a paid employee is a happy employee and your business runs better when employees are happy.
If you’re tired of spending countless hours tabulating work hours and calculating payroll, there are a couple of options. The first option is to hire an accountant or payroll services firm to handle payroll for you. The other option is purchasing software that speeds up the payroll process. Let’s take a look at the advantages and disadvantages of each of these two options.
Cost is usually a significant consideration for small and mid-size businesses, especially in an economy like we have now. Accountants and payroll services can easily cost you $100 a month and often much more. The lower the cost the more work you’re likely to do yourself. Software runs the gamut from less than $100 a year to several hundred or even thousands of dollars. In most cases, the more you pay the more features you get. But do you need all those features? As a small business, probably not. Make sure you have a chance to try any software before committing to buying it.
Payroll data needs to be secure. Small firms and solo-accountants are not likely to have the same level of security as large firms and computer systems may be vulnerable to hackers or data losses. If you’re considering hiring an accountant or small firm, make sure you ask about their security and back-up systems. Assuming you have adequate security measures for your computer system, including firewalls, secure data back-ups and 128-bit password encryption, using in-house software is a reasonably secure way to handle payroll. You’ll know exactly who has access to your records and no data needs to be transmitted across the Internet.
Time involvement and ease of use
It may seem that hiring an accountant or payroll service would require the least amount of time, but remember that you will still have to keep the accountant or service updated with employee work hours. Software can also save you significant amounts of time by automating payroll activities. Unfortunately, financial software is notorious for being difficult to learn. Look for payroll software that is specifically designed for end-users who are not accountants.
Only you can decide
Every business is unique and while payroll software is often an efficient, cost-saving payroll solution for most small and mid-size businesses, you may find that you enjoy the freedom and expertise of hiring an accountant or payroll service. Only you can decide which is right for your business.
Recommended Books on Payroll Management:
- Payroll Management: 2013 Edition
- The Employer’s Payroll Question and Answer Book (2012)
- Payroll Accounting 2013 (with Computerized Payroll Accounting Software CD-ROM)
- Payroll Best Practices
- A Small Business Guide to Doing Payroll:The Essential Guide to Understanding Payroll and What Software is Available to Help You
About the Author:
- 4 Big Reasons to Choose In-House Payroll Software
- The Enthusiastic Employee: 16 Myths on Employee and Performance Management
- Hiring and Retaining Good Employees
- 3 Benefits of Payroll Software to a Small Business
- Hiring an Accountant: What to Look For