Why “Cheap” Payroll Software is Usually More Expensive

“Good work ain’t cheap, cheap work ain’t good.” –Norman Sailor Jerry Collins

In a buying decision, we all have a tendency to apply a higher weighting to the price factor than to quality. Occasionally we can get away with the cheaper price, but more often than not, it can get us in trouble, especially big ticket items like automobiles, houses and software.

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I recently received a call from a highly respected client –a complete A-lister in their area of expertise informing me of their decision to go in for a cheap local payroll software instead of renewing their Sage payroll license. As I write, the project is six months late, out of scope and out of budget.

In an effort to be budget-conscious, this client decided they could no longer afford a seasoned pro and hired a much less experienced (but enthusiastic) individual to do the job. In their mind, it would probably take a little longer, but, hey, it was cheaper!

Well, things have spiraled out of control, and they find themselves at the verge of losing key accounts and not an inch closer to where they needed the development of the new software to be. To twist the knife, resources expended on the project could have been used in raking in more clients.

With all best intentions, this investor had just paid a huge amount of money to a cheap provider probably with no returns. Good news, they are still on Sage but has learnt this experience the hard way. Sadly, this story is a common one!

We want to share with you why buying cheap softwares can ultimately cost you more.

First and foremost, there is always an eventual cost to company for non-compliance. Most companies are being slapped with fines for unfulfilled tax liabilities. These cheap software’s are most often not certified as being tax complaint and do not have a research team backing them to ensure continuous compliance. They will often rely on you to tell them what is changing and where these changes are taking place.

While businesses typically strive to stay updated with regulatory changes that may occur, too often the overwhelming amount of information leads to compliance gaps. Most payroll software giants like Sage have a whole legislative team who are experts and always up to date with income tax changes for every country. This is mostly not the case with cheap payroll software developers.

Secondly, a research conducted shows that most cheap payroll software developers either outsource the development process or use poorly remunerated staff resulting in high labour turnover. This goes a long way to affect the quality of the product and the after sales support.

Technically, it takes approximately 6 to 12 months to know all the functionalities of a payroll software in order to render the necessary support to your clients. Not getting the needed support from the right person could be very time consuming, frustrating and could eventually impact quality. It is always better to deal with suppliers with good staff retention rates and solid control over your historic support issues.

Thirdly, a research carried out by Nathan P. Kropp, Philip Koopman and Daniel Siewiorek past students of Carnegie Mellon University revealed that most cheap software are very vulnerable to attacks by viruses and hackers. Viruses can wipe out all your data without a trace while hackers can tap into your database and get away with confidential information. This also makes it easy for users to manipulate figures and hence use dubious means to make extra money from the weakness of the software.

Cheap payroll software developers do not have the resources to fund the cost of regular penetration testing that will give you the comfort against these vulnerabilities. A business could lose a lot of money if these acts go unnoticed.

Fourthly, the absence of annual renewal cost makes these payroll look cheap. The absence of annual renewal cost means the software would not see any upgrade nor further enhancement to the features of the software in subsequent years. This makes the software a “monster” and eventually obsolete rendering it difficult and less exciting to use. No new statutory reports (tax, tier1 and 2) would be implemented to reflect the changing trends, this means users would have to spend a lot of time manually producing such reports in excel. This human interface could cause a lot of omissions and fraud.

In conclusion, if you are in the business of processing payroll always insist on using quality, tried and tested payroll software such as Sage Payroll Software. Insisting on quality means you would be equipped to work more efficiently, safely and enjoying the support of dedicated and experienced consultants.

“If you’re running a business and—for whatever reason—you decide that an arbitrary markup of your merchandise/cutting corners on quality is OK, you can bet that customers will find somewhere else to spend their money.” Frances Cole Jones