Payroll Software for Accountants

Whether you're a solo CPA or one of many at a large accounting firm, offering employee payroll services to clients can represent a significant boost to your bottom line.

It can also present significant challenges.

Not only do you need to ensure that all of your clients' employees are paid accurately and on time, but there's also the matter of making sure the government gets their correct cut too—something that's often easier said than done. The IRS estimates 40 percent of small to midsize businesses (SMBs) end up paying a payroll penalty each year due to an incorrect filing.

With so much on the line, having the right payroll software is crucial. But which system is best suited to meet your specific needs as an accountant?

This Buyer's Guide aims to provide some guidance. Below, you'll find information about payroll software functionality, pricing and more to help in your software search.

Click a link below to jump to that section:

What Is Payroll Software for Accountants?
Common Functionality Found in Payroll Software for Accountants
Benefits of Payroll Software for Accountants
How Much Does Payroll Software Cost?
Final Considerations

What Is Payroll Software for Accountants?

Payroll software for accountants allows CPAs to manage worker wage information, calculate amounts for employee compensation and withheld taxes, do payroll runs, generate reports and more. Many popular payroll software systems cater to both internal accountants and outsourced accounting firms.

An example payroll run in QuickBooks Full Service Payroll

Payroll software offers accountants a secure digital environment to automate processes, set reminders and manage a vast amount of payroll data over time.

Common Functionality Found in Payroll Software for Accountants

Browsing through payroll vendor websites can quickly become overwhelming if you're not sure what you're looking for. To help, here are some common functions you can expect to find in most systems:

Employee management	Track individual employee pay rates (hourly or salaried), withholding information for benefits and paid time off (PTO).
Time tracking	Input hours worked, or pull them from an integrated time and attendance system, to calculate correct wages.
Run payroll	Set a payment period (biweekly, monthly etc.) and calculate the total payroll cost for that period.
Payroll allocation	Deposit owed payroll amounts to workers in their preferred form (direct deposit, check printing or pay card).
Tax management	Calculate correct amounts for local, state and federal payroll taxes and file automatically.
Accounting integration	Automatically log payroll amounts in the company ledger through integrated accounting software.
Reporting	Generate standardized reports detailing organizational payroll costs.

There can be small differences in features within these functions between products. For example, some products offer multistate or even multicountry payroll, while others don't. Another example is some payroll platforms can generate W-2s and 1099s for workers come tax time.

One increasingly popular feature is an employee self-service portal where workers can log in to do things such as update their bank accounts or download past pay stubs themselves. This article highlights a few benefits of implementing self-service features.

Benefits of Payroll Software for Accountants

In a 2015 report, Software Advice learned that one in every five payroll software buyers still relies on manual methods such as spreadsheets or pen and paper to handle their payroll needs. If you fall into this group, it's time for an upgrade.

Here are some benefits that dedicated payroll software can bring over manual methods:

• Fewer errors. Clerical errors can lead to costly overpayments and penalties. Payroll software can calculate accurate wages and highlight any missing fields or strange discrepancies to ensure you don't make any major mistakes.
  
• Less security risk. Features such as multifactor authentication and SSL encryption found in payroll software can mitigate the chances of your sensitive payroll data getting lost or falling into the wrong hands.
  
• More time to focus on other needs. With features such as one-click payroll runs and automatic report generation, you can cut the time it takes to do payroll for a company from a few hours down to a few minutes.

How Much Does Payroll Software Cost?

How much you pay for a payroll software system is going to largely depend on two factors: the breadth of functionality in your system of choice and the number of employees you're doing payroll for. The more advanced the system is and the more employees you need to manage, the greater the cost.

Because most systems are cloud-based (meaning the software is hosted by the vendor on their own servers for you to access via a web browser), payroll software is almost always sold through subscription licensing. In other words, you should expect to pay a flat fee every month, every year or every pay period to use the software.

Software license prices can range from as little as $10/month for one employee all the way up to $3,500/month for 250 employees or more.

Download our payroll software pricing guide to learn specific cost information for popular systems such as Gusto, Xero and QuickBooks.

Final Considerations

We've covered the basics, but there are still a number of factors to consider when deciding which payroll system is right for you or your firm. Here are some last things to keep in mind during your search:

• Do you need full service payroll? A number of payroll software vendors offer a “full service payroll" option where all you have to do is enter employee wage information and the vendor's team of experts will take care of the rest: running payroll, submitting tax forms, printing checks etc. This option tends to be geared toward small business owners who don't know a thing about payroll, but accountants can benefit too if they're looking to offload some work.
  
• Pay attention to the UI and workflow. Payroll software products tend to have a lot of the same functions and features due to the payroll process being so standardized. Where they really differentiate is in their user interface (UI) and workflow. Demo systems and find one that's intuitively designed and easy to use.
  
• Ask an expert. If you're overwhelmed by the software options available to you, don't worry. Give us a call at (844) 852-3639 and talk to one of our payroll software experts. We'll ask a few questions about your needs and send you a shortlist of best-fit, highly-rated products. This service is completely free, so don't hesitate.