If you’re in the market for new payroll software you’re probably finding yourself asking a lot of questions. Should I stay with my current provider? Can this process be simplified? Is there a software I can use that will pay my taxes automatically? Do I want more than just payroll from my software? Before you can answer any of those questions, you must first decide if you will be utilizing an installed solution, or a cloud-based one. So what is the difference anyway?
Installed Payroll Software
This software is exactly as it reads, installed. When you buy installed software it is similar to buying Microsoft Office for your computer. You buy a box of disks and one by one you install them onto your computer. Because you are installing the software onto your computer there are no monthly charges, just the one-time fee of purchasing the disks. However, this also means the software is not updated unless you buy the updates (aka purchase newer versions). Also, the software is limited to the computer you put it on.
Cloud-based (or online) Payroll Software
Cloud-based software is ideal for medium to large businesses because it allows access from several computers. For example, if Company A has three locations that all run payroll separately each location can process their own payroll online using the software. Unlike installed software, cloud-based receives regular updates and improvements. A good online payroll software will also have checks and balances in place to catch inaccuracies before you process your payroll, helping you avoid penalties. Liabilities are no longer a problem when you process using an online payroll software; once you process your payroll, taxes are automatically taken care of.
An added bonus of using online payroll software is the support you get from customer service. If you need to make an adjustment, but are not sure how, you can reach out to your software company and a support professional will be able to walk you through the process.
Weighing the Pros and Cons
Ultimately you are the one who knows what is right for your business. Whether that is installed software or cloud-based is dependent upon your business size, model, and processes. If you are currently using installed software and find yourself spending too much time on payroll, it might be time to upgrade to an online solution. However, if you have 12 employees and it only takes you an hour to enter in your payroll and get everything squared away, installed software will work fine for your business. This isn’t to say a 12-man company can’t use online payroll software, it simply is up to the business to decide which platform better fits their needs and wants.
Interested in learning more about online payroll software? Request a demo and see how Dominion’s cloud-based software can simplify your payroll.