Online Payroll Processing or PC Based Payroll Software--What's Better?

PC Payroll Software Advantages:

1. You have total control of your data. Should you decide to change payroll business software in the future, all your data will be archived for you on your own system and will still be easily accessible to you; with online payroll processing you will only have the reports they send you summarizing the data. For example, if the Department of Labor requested the wages of a particular employee for last June, with the PC based system you would be able to date-range the month of June, and come up with a total figure relatively quickly and easily. By contrast, after you leave the online system you only have the reports, and you would need to look up each individual week for the month of June and add up the total; you would still be able to retrieve the necessary data, but it may take you more time.
2. Although up-front costs are are larger than a month's fee for online payroll services, payroll software is usually less expensive in the long run.

PC Payroll Software Disadvantages:

1. You must back up all the data yourself. If you ever have a computer crash, you could re-load the software, but all your data would be lost unless you are vigilant about backing up your data often.
2. You can only access your data from the computer on which it is loaded.

Online Payroll Processing Advantages:

1. You are able to access your data from anywhere.
2. When an upgrade becomes available, your payroll company will automatically give it to you.
3. All of your data is backed up for you by your provider's computer server.

Online-Payroll-Processing Disadvantages:

1. For most online payroll services providers, the monthly "hosting charge" is comparable to outsourcing (but with outsourcing, they take responsibility for your taxes.)
2. When you decide to leave or change payroll business software, all you have are your ongoing reports; you no longer have your complete "database" (see #1 under PC Payroll Software Advantages).