If you're thinking about replacing your payroll software you have an important decision to make.
But which approach is better; integrating individual pieces of software into your existing payroll systems or purchasing a brand new payroll software package?
Both have pros and cons, let's explore some...
Buying new payroll software - The pros and cons
Definition: Buying a new piece of off-the-shelf payroll software. (Side point: If you're interested the benefits of off-the-shelf vs bespoke payroll software you might enjoy this article: The Best Payroll Software Solution: Off-the-shelf or Bespoke?)
Pros
Modern tech
New software is more likely to use up-to-date technology. Software development standards are always changing and improving, while maintenance and upgrades to old software can take you so far, a better way to ensure that your payroll software uses the latest standards is to buy newly developed software from a reputable supplier.
Competitive edge
Using new software can help to give you the edge over your competition. Having payroll software that is faster, more reliable and more accurate than the software being used by your competitors could help you to gain market share and retain it more easily.
Compatibility
Relying on a single piece of new payroll software, rather than a patchwork of different pieces of software stitched together, lessens the chances of compatibility issues. The fewer individual pieces of software you have, the less maintenance that needs to be done, and the less chance you have of incompatibility between individual parts of your software ecosystem.
Cons
Loss of data or functionality
Migrating to a new piece of software could result in data or pieces of legacy functionality being lost. As software standards develop and improve, older methods and formats are sometimes abandoned. We recommend thoroughly testing payroll software before making the final decision to migrate. Also, you've likely heard it thousands of times but....always take a backup.
Unnecessary features
New software may contain extra functionality that you don't need. While it can be good to have additional functionality at your fingertips, sometimes you just don't need all the extra bells and whistles.
Learning curve
Learning how to use your new payroll software might take a while, particularly if it is fundamentally different from your old payroll software. Taking time to understand becoming familiar with your new software is key before making the final decision to migrate your systems over.
Lack of field testing
Errors and bugs can be more common in very new software. As software is used over and over again in real-world conditions issues can be identified and patches released. Newer software can be prone to unforeseen issues. We recommend choosing software from a reputable provider with a good support package to minimize the fallout from potential issues.
Payroll software integration - The pros and cons
Definition: Bolting software onto your existing software packages to improve or extend your capabilities.
Pros
Scalability
Integration empowers you to gradually build on top of your existing systems. Rather than changing everything in one fell swoop, you can gradually scale your payroll systems with new functionality and add-ons as the need arises.
Relatively inexpensive
Paying for small software integrations is likely to be less expensive than introducing a whole new payroll system. Caution is needed to ensure that you aren't paying for functionality that you don't need. We recommend building a good working relationship with your payroll software developer from the start, to ensure that you both understand what the requirements of your business are.
Functionality on-demand
The variety of software integrations available allows you to choose functionality that meets your business needs. Payroll is a dynamic, fast-paced industry. A modular approach to your payroll software means that you can integrate specific pieces of functionality as and when they are needed.
Cons
Compatibility issues
Introducing new payroll functionality could cause issues with your current systems. This is to be expected when two or more different pieces of software developed independently of one another are suddenly thrown together. To reduce the risk of software compatibility issues we recommend testing your software integrations before making them live. If issues occur after software has been integrated professional maintenance and troubleshooting can help to resolve issues.
Maintenance could be more complex
Maintaining distinct pieces of software can be more challenging than working on one holistic software package. Independent software developers tend to release patches at different intervals meaning that your whole system may have to delay updates until a fix is released for a particular integration.
Clunky user-experience
Integration between different pieces of software can make the user journey a little bumpy at times. We recommend using a professional software developer to help smooth out any issues and get your software working smoothly.
The final verdict - Which is better; payroll software integrations or buying new payroll software?
As you've probably guessed already, the answer isn't a clear-cut A or B solution. Payroll software integrations and buying new payroll software can both be good options depending on your unique circumstances. We recommend taking the time to research both options and seek professional advice to help you come to a good solution for your business.
If you would like help to make an informed choice about your payroll software, please feel free to contact us and benefit from over 30 years of experience.