Myths about Payroll Systems and Processing

Let’s get real about processing payroll. If you search around a bit on the internet, you will see a huge variety of payroll software vendors and payroll service providers. Each one of them is different, with their own set of features, services, and pricing. Some of the companies you read about or speak to will make claims about how you should be processing your payroll. The truth is that nobody knows what is best for your company and its specific payroll need, unless they get to know you first. There is no ‘one size fits all’ alternative to payroll processing. Payroll has many facets, and no two companies handle it in the same way. Here are some of the commonly found myths about payroll processing, and why they are not true.

  1. You will save money by switching to a payroll service or to payroll software.

    Sure, one of them might be true. But be skeptical if somebody tells you that you can save money with their system, before they understand your specific needs. Many factors impact the money you spend on payroll processing, just a few of which are your number of employees, method of entering and calculating time, and tax filing method. Making sure your company’s payroll needs are met is more important than saving a few bucks, so make your needs the first priority, and then you can start looking at pricing.

  2. When it comes to payroll tax filing, you should (insert method here).

    Growing technology has brought us a variety of choices where payroll tax filing is concerned. You can still purchase the forms and mail them (unless your state requires you to file online), but you can now file online or even have the whole process outsourced. How you choose to do this will depend on your state requirements because states are continually lowering the employee threshold where you must e-file or do online forms. Minnesota, for example, requires all employers to e-file or do online reporting when filing quarterly unemployment wages.

  3. You should be paying your employees via (insert method here).

    I once heard a story about a company who decided to pay their employees via direct deposit, eliminating the printing of payroll checks. Most employees were excited about the change, but one man stated he was extremely angry about it and really wanted to keep getting his printed check. Then the switch was made and, well, it turned out he loved skipping the trips to the bank. (Hey, change can be hard!) You can still print checks, or you can use direct deposit or even pay employees with a debit card. Only you and your employees know which method is best. For instance, you may want to use debit cards for those without bank accounts, and direct deposit for the others. Analyze what works best for your company and your employees, and make the decision based on that analysis.

There are lots of vendors out there providing payroll software and payroll services. Just be sure that before jumping ship on your current method, you look out for your own company’s needs first. Don’t fall prey to the sales rep who uses one of the above blanket generalizations without first understanding your business.

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