Having a Separate Payroll System - Good Or Bad Idea?

If you're running a business chances are that you run it on a computerised accounting package such as MYOB, Quicken, Quickbooks or something similar. Now these particular software companies have been clever here because you may notice that the basic versions don't actually have a payroll module included, and you still have to pay your employees, right? So now you need to purchase a separate payroll module.

But, what happens when you decide to shop elsewhere and see what other payroll software can do? You might want a simple program "that just pays people" and you're not worried about anything else. Or, what you're looking for is a complete HR suite that tracks employee holiday / vacation time, staff training needs, provides details reporting etc.

If you have selected a third parties payroll software, you now have to quickly establish whether it's compatible with your current accounting software. If not, then you run the risk of having to do manual journal entries to bring the data across into your general ledger. This not only is time consuming, but increases the chance of human error resulting in inaccurate information in your financial reports. This is not an ideal situation, therefore you need to research each payroll product carefully and ask as many questions as you feel necessary so you can be sure that your systems will "talk to each other" without the need for human intervention.

When it comes to installing accounting systems, I've been there and done that and if I can pass any advice on to you, it's that the more research and preparation you can do early on the more likely the installation will run smoothly.