A few decades ago, businesses needed to use accountants to manage financial data.
Today, times have changed. Today’s businesses often use payroll software to save time and money. Payroll software offers a number of advantages over using an accountant. However, no free payroll software service is perfect.
Should your business use an accountant to manage finances and pay employees? Or should you subscribe to an online payroll service?
Why Online Payroll?
Online payroll software is affordably priced and easy to use. Many of today’s top payroll software programs are cloud-based, which means all data is synced across all devices.
You can manage employee payroll data on-the-go and employees can often report their own hours. Pricing is flexible and simple. Even someone with no accounting experience can use the software to pay their employees every payroll period.
Here are the most important advantages of using online payroll software:
Easily Calculate All Employee Taxes and Deductions
Every time you pay your employees, you’re legally required to deduct payroll taxes. Calculating these payroll taxes isn’t always easy. Payroll taxes change from state to state and some localities have their own additional taxes.
Payroll systems takes all of these headaches out of your life. Payroll software automatically deducts unemployment, health insurance, stock purchasing plans, and any other required deductions. Some deductions are automatic and required by law, while others are voluntary deductions established by your company. You can garnish a particular employee’s wages and provide bonuses, for example, or deduct an amount from another employee based on stock purchasing agreements.
Affordable Pricing With Online Payroll
Accountants are rarely cheap. Some businesses require a dedicated in-house accountant, while others require an entire accounting department. Even if you only work with an accountant during tax season, you may still be left with a bill worth hundreds of dollars.
Payroll software starts for as little as $10 per month for the most basic level of service. You will need to pay an extra fee per month per employee. You’ll also need to pay an extra monthly fee if your business has employees in multiple states.
When you break down all of these costs, you’ll find that most payroll software is considerably cheaper than hiring an accountant.
Online Payroll Grows With Your Business
Payroll programs is used by all different types of businesses. It’s well-suited for businesses in many different industries. More importantly, payroll software grows with your business. If you’re the sole owner, operator, and employee of your own business, then you won’t have to switch to a new payroll software program once you hire a few employees.
Whether you currently have one employee or 100 employees, payroll software can suit the needs of your business.
Online Payroll Bundled With Bookkeeping and Accounting Software
Employee payroll is just one aspect of business accounting. You also need to track income and expenses, produce business reports, and do all of the other things involved with running a business. That’s why payroll software often comes bundled with accounting software and bookkeeping software.
Intuit Online Payroll, for example, syncs well with Intuit QuickBooks. You can save money by bundling the two services together. If you choose the right software bundle, you’ll never have to call your accountant again.
Pay Via Direct Deposit Or Printed Paycheck
Almost all online payroll services let you pay via direct deposit into employee checking accounts. If you don’t like direct deposit, you can also pay via printed paychecks. Some payroll software programs – like Intuit – let you print employee paychecks from your office printer. Others – like Paychex – will mail printed paychecks to your office.
File IRS forms Easily
Most payroll software programs make it easy to file IRS forms. Some services simply notify you when forms are due, while others print off pre-filled forms on your behalf or let you file forms instantly online.
Pay W-2 Employees and 1099 Contractors
Does your business have multiple types of employees with unique needs and statuses? You can still use payroll software. Almost all payroll software allows for easy payments of both W-2 employees and 1099 contractors. However, some payroll services – like Intuit – don’t allow 1099 contractor employees on the most basic version.
On-the-go Payroll Management
Of course, one of the biggest advantages of online payroll software is being able to easily manage your business on-the-go.
Most of today’s top payroll services offer mobile apps for iPhone, iPad, and Android. You can easily access your payroll data anywhere you can access the internet. Whether you’re on vacation in Mexico or you’re in the office on your desktop PC, you can easily log into your online payroll account and enjoy top-quality payroll services.
Data Backups and Enhanced Security
One of the benefits of cloud computing is enhanced security. All payroll data is encrypted. Plus, the payroll service frequently backs up your data. If you mess something up or accidentally delete an employee, it shouldn’t take much effort to recover.
Payroll Software Isn’t Perfect
Based on all the advantages listed above, you would think online payroll software was perfect. But it’s not. There are some faults and there are many reasons why you may want to hire an accountant or an entire accounting department.
Why Choose An Accountant?
For years, businesses have relied on accountants to manage critical business data. Here are some of the advantages offered by your trusty accountant.
Personal Level of Service
Some people enjoy interacting with a real person when managing payroll data. There’s nothing wrong with that: it’s important to get payroll data 100% correct and some people don’t trust a computer program as much as they trust a real human being.
When you hire an accountant, you enjoy a personal level of service you won’t get with online payroll software. You can call your accountant and ask for advice, for example, and enjoy bulletproof assistance during tax season.
More Than Just Payroll Data
Your accountant advises and supports your business in ways that online payroll software simply cannot. An accounting department, for example, may manage your business’s bookkeeping, employee payroll, and all other financial data involved with your business. Payroll software, at its most basic level, will simply process employee payroll.
Not all Payroll Software Is Made Equal
When you work with an accountant, you know what you’re getting. Maybe a friend recommended an accountant or you hired an accountant based on a stellar resume. Payroll software, on the other hand, can be more difficult to research.
Not all payroll software is made equal: some payroll software is indisputably better than an accountant, while other payroll software is worse than an accountant. Read reviews, understand your needs, and spend a good amount of time choosing the right payroll software for your business. Otherwise, you may wish you had chosen an accountant.
Conclusion – Which One Is Right For You?
What’s the verdict? Should you choose online payroll software or an accountant?
Obviously, the answer to that question varies according to the unique needs of your business.
Typically, small and medium-sized businesses with relatively simple payroll needs can save time and money with online payroll software.
On the other hand, larger businesses with more complex needs may find that accountants offer risk-free, painless service.
Most importantly, it depends on the quality of your payroll software and the quality of your accountant. Some of today’s payroll software comes bundled with accounting software and bookkeeping software. On the other hand, a good accountant may be able to handle all your business’s needs for a fraction of the price.
Do your research, read payroll software reviews, and consider how much time and money your business could save with either approach.
If you’re still on the fence after all that research, consider a payroll software free trial. Most of today’s popular services offer easy free trials that let you add employees and pay them during a risk-free 30 day period.