Payroll Software: What to Consider Before Your Search

If you are searching for new payroll software, you are either just starting up, or you have outgrown your previous system. Either way, there are certain problems you must solve with your payroll software! Before you begin conducting your search and calling vendors, take the time to consider these four important points. They will leave you better prepared for your search.


Maybe you need to keep track of employee garnishments in a certain way, or you want to use direct deposit rather than issuing paper checks. No matter what your needs, be sure to write them all down on paper so you don’t forget them during your search! Use this check list to organize your thoughts.


Several things can affect the scale of payroll software that will fit for you. If your budget is $2,000, then that’s where your search efforts should be focused. Having said that, you might find that your needs exceed your budget. Things that can affect the cost of your payroll software are the number of users, employees, and companies managed. Some of the features that typically affect cost are: direct deposit, tax filing method, multiple state tax filing, custom payroll setup, and more. Therefore start with a budget in mind, but understand that your needs may require you to adjust the budget accordingly.


Do you have the computers and/or networking capabilities necessary to run your payroll in-house? This is the major question you need to answer to help you decide whether to use in-house payroll software or software as a service. Some people like the control of having the whole system in-house, while others do not want the cost or responsibility of purchasing and maintaining hardware. If you are one who doesn’t want to deal with the hardware, then software as a service is probably the right direction to go. On the other hand, if you have the staff and hardware available, and you desire more control, then go down the road toward the payroll software option. Both in-house payroll and software as a service are extremely popular; it just depends on the needs of your business.

Future needs.

The reason many people switch software is that their payroll needs outgrow their software. They need to manage payroll for more employees, or need more flexible pay entry, etc. The list of reasons all depends on that company’s needs. You can prolong the life of your payroll software by projecting your needs for the next seven years or so. Ask yourself, will you expand to paying employees in other states? Will you add another business location? Will you want to offer employees debit cards or direct deposit for their pay? These are all things that should be considered, and then you should choose the payroll software accordingly.

Being prepared for your payroll software search can help ensure you get a payroll system that fits well and can grow with your company for years to come.

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