Dangers of Free Payroll Software

An increasing number of businesses are opting to outsource payroll to ensure there are no discrepancies in this crucial administrative function. Not only does managing payroll in-house cost more, but it puts the company at risk in case an error is made. With more government and tax regulations coming into effect, it’s essential to keep up with regulatory compliance. In-house staff may find it difficult to stay abreast of these changes, especially if we’re talking about a small to medium-sized business.

Businesses Need Reliable Payroll Management

Take the town of Frederick, Maryland, for example. Frederick has a working population of more than 120,000 people. Being among the up and coming localities in Maryland, Frederick has managed to make its way up the economic ladder thanks to its talented workforce, 34% of whom hold bachelor’s degrees. With it’s professional class, many businesses have turned to payroll software to better manage the process. However, since most small-to-medium businesses just about everywhere have limited capital to work with, some are opting for free payroll software instead of using a professional payroll service.

The Slippery Slope of Free Payroll Software

While free always sounds good, it is seldom a good option when you’re talking about relying on it for an important function like payroll. This is why we advise businesses against falling into the free payroll software trap because they often have to pay the price later; a price that may be enough to jeopardize the existence of their business.

No Cost Means No Guarantees

To start with, payroll software that costs nothing comes with no guarantee to provide you the assurance you need to professionally manage payroll. To be more specific, outsourced payroll firms offer a variety of features and benefits that truly help a business handle payroll matters, whereas free payroll software is a hit or miss option. At the end of the day, if the free software fails to perform its function in any capacity, you can’t hold anyone responsible.

Lack of Electronic Payment Method

Free software for payroll will usually not have the ability to pay employees electronically. According to a recent survey, more than three quarters of employees don’t want to be paid via conventional checks anymore. So if a company doesn’t have the ability to give out salaries electronically, it will face employee dissatisfaction.

Failure to Comply With Regulations

In addition, as discussed previously, governments are always changing and introducing new laws for payroll. The last thing a business wants is to be penalized under the U.S. Fair Labor Standards Act for violations since employers and even managers are held accountable. So with free payroll software, you run the risk of violating regulations, facing legal trouble, and even fines.

Possible Audit by the IRS

Last but not the least, tax season is usually a nightmare for any business, regardless of how large or small it is. With a professional payroll service, like BCM Payroll Services, you get to take advantage of advanced features that make the job of calculating taxes on salaries much easier. At the same time, this option is cheaper than hiring an accounting firm to do the work. However, most free software for payroll does not contain the feature to accurately calculate all state and local taxes. Even if it does, the methods are far from reliable. Once again, no business wants to get in trouble with the law, especially the IRS because the next step is a dreadful audit.

Secure Your Future

Therefore, it’s a safer to rely on the professionals because it will pay off down the road. You can continue running your business and focus on matters that need your attention instead of worrying about hiring an in-house staff to manage payroll or worse, fret about free software that leaves your business open to potential liabilities.