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Making Payroll Easy with Software as a Service


What makes Software-as-a-Service (SaaS) payroll services more affordable and less cumbersome than traditional payroll services? It's the same dynamite behind SalesForce.com's explosion into the online customer relationship management (CRM) marketplace: it's not what you deliver, it's how you deliver it.

SalesForce.com didn't invent CRM or make vast improvements in the CRM arena. In fact, its features and capabilities are virtually the same as its on-premises peers'. SalesForce.com did, however, democratize CRM by taking on the burden (and high price tag) of hosting the software, providing free upgrades and maintaining all the hardware. Likewise, a SaaS payroll service and a traditional payroll service will offer similar services — at least a good SaaS payroll service like SurePayroll.

Robust online payroll services and traditional payroll services will perform the calculations and deductions, deposit and file all payroll taxes along with 940s and 941s, report new hires to appropriate agencies and more. With a true SaaS payroll service, you'll save roughly half the cost of traditional payroll software, and never fret about up-to-date tax tables or outdated hardware like you would using payroll software.

It's how those services are delivered that's turned payroll into next wave of rapid SaaS adoption.

Aside from providing the same features for less, SaaS payroll services include a more convenient and far less time-consuming method for entering payroll. The steps for processing payroll on with a SaaS solution generally comprise:

  1. Logging in to a secure Web site and entering employees' payroll data for the pay period.
  2. Ensuring the payroll information you entered is correct.
  3. Approving payroll.

Only worthwhile SaaS payroll services will deduct and file all applicable payroll taxes and pay employees by direct deposit, or enable payroll administrators to self-print paychecks. Pay stubs and W-2s/1099s should be available in personalized online portals for employees, and payroll administrators should be able to access payroll records online. A select few SaaS payroll services will also provide clients' accountants with secure logins to payroll records. At the appropriate quarterly and annual intervals, IRS 940 and 941 forms, as well as paperwork related to state unemployment insurance, should automatically be filed.

Traditional payroll services offer the same follow-up services such as paying taxes, creating reports, etc., as robust online payroll providers do, but traditional payroll submission is facilitated in two primary ways: faxing or phoning in payroll information every pay period. Both methods require the payroll administrator to block off a designated timeslot every week that is convenient for a representative from the payroll service. And payroll administrators cannot review payroll before checks are cut and deposits are made. When a shipment of wrong checks arrives, you'll spend hours on the phone trying to resolve the matter — and you'll have many rightfully unhappy employees to answer to.

As the differences in features diminish between traditional services and SaaS services, many entrepreneurs and businesses are reevaluating how they run processes. They're already depositing checks from customers online through DepositNow, managing customer relationships through SalesForce.com, sending their emails through Constant Contact. And soon—if not already—they'll outsource payroll to a full-service SaaS payroll provider.