An in-house payroll software solution might seem like a good solution to organisational needs; it isn’t always that simple. You have to consider overall scale of operations, available resources and effort, especially within the context of a small or medium business (SME). Payroll solutions need to deliver the best results at the best price with a minimum of effort; SME energies are better focused on growing core business and remaining competitive.
So let’s look at the ways in which in-house payroll software becomes less efficient than an outsourced payroll process:
Security: Payroll processing demands a considerable level of security. This includes firewalls, high-level encryption and extensive data back-up. If you’re installing this level of security purely, or solely, to secure your payroll process, it’s a clear case of overkill. A dedicated process outsourcing partner would already have the requisite security framework in place – this can be audited during the pitching stage itself.
Maintenance and updates: With in-house software, updates of new tax tables and of course performance upgrades will be needed at least once a year. You will need to invest in a server and in a skilled resource to maintain the software. Again, given the need for efficiency and economy, it would prove more sensible to outsource to a partner who is already taking care of these aspects as part of their professional ambit.
Integration: Then there’s the question of whether the software integrates with your other IT infrastructure and delivers a usable output. Ensuring this might require the inputs of a programmer-level resource as well as extensive research.
Direct Deposit: Setting up and updating direct deposits with in-house software can be a time-consuming, complex process, if such an option is provided at all. When you outsource your payroll process, however, the onus of updating and maintaining direct deposits falls on the provider, who has already invested in the skills and bandwidth to do so.
It comes down to a trade-off between control and convenience. Even boiled down to these terms it’s worth noting that an outsourced solution still lets you retain control over how you run your payroll process – however, your outsourcing partner takes the time- and resource-intensive aspects off your hands, freeing you to focus on driving your business growth.