Over the last twelve months, the payroll software scene has expanded in, if not dramatic, at least interesting, fashion. We’ve seen an increase in the number of offerings out there, with some major players adding new tie-ins and features. There has also been an increase in smaller players in the space, with some offering standalone products while others are trying to give you ways to work with your existing accounting software.
Here’s a rundown of what’s been happening in the space, along with some insight into why the changes are happening now. We’ll start with some of the newer options from established players.
The big names in accounting
I first happened across this payroll trend last year when I was out at SleeterCon (now called AccountEx) in Las Vegas last year. For reasons that were unclear to me then, everyone seemed to be launching or promoting a new payroll solution. I think three separate companies kicked off new campaigns to promote their software in one day.
Xero expanded its reach, adding new states to its supported locations. This is important for a number of fairly self-explanatory reasons, but the real win is that it allows more enterprise-level companies to consider the service. By supporting more states, you open up the possibility that a business operating in fifteen different locations can now use the service.
Zenefits – provider of my current backpack – launched its payroll offering in November last year. The company’s focus has always been on moving back office operations out of the office entirely. The payroll system is currently in limited release, with a free offering through the end of 2016.
Square also launched a payroll service last year. Square Payroll takes advantage of the company’s existing payment processing capabilities, extending them to small businesses that probably already use the point-of-sale system.
Smaller but not out of the running
There are also a handful of smaller operations that have new or updated payroll options. ZenPayroll, for instance, updated its offering and changed its name to Gusto. Gusto now offers health care benefits and workers’ comp to users of its payroll service.
Last year also saw the introduction of FingerCheck360, a payroll solution from FingerCheck. The company had been focused on time tracking and attendance software, but decided to expand into the payroll space.
Why the push now?
The increase in payroll interest has, I believe, three components. Additional revenue streams for accounting software firms, more reach for traditional accounting systems, and the race to be the best all-in-one financial software provider.
Additional revenue is fairly self-explanatory. Companies are seeing an increase in demand for payroll systems, as regulation increases and taxes become more complicated. By managing a team of specialists off-site, software providers can give businesses the attention to detail that they need, without incurring the high costs associated with specialists.
Tied into that is a chance for traditional accounting software companies to make more out of their existing offerings. By adding payroll to Xero, for instance, the company is able to increase its share of wallet.
Then, building on those two ideas, we have the race to become the best all-in-one provider in the market. As more document and financial automation seeps into the landscape, companies are able to provide a larger set of financial solutions, all tied to each other.
Being the business that deals with all of your business’s finances has to be the end goal for many of these companies. That means managing your payroll and understanding your business needs. Financial software is in an interesting place, for sure.
To get more insight into tips and trends, check out Capterra’s finance software blog. For a full listing of payroll offerings, check out our payroll software directory.
Looking for Payroll software? Check out Capterra's list of the best Payroll software solutions.