Nonprofit News by Soft Trac

In the past, outsourcing payroll duties was a good option especially if your organization had limited resources and time. A staff member provided essential information about your organization and employees and the payroll service took care of generating the checks, making the tax payments, filing tax returns and distributing the year-end forms.

If you have a small payroll of less than ten people with few programs or departments, that still remains a good option. However, as payroll software technology has advanced, we are seeing many organizations re-evaluating the benefits of bringing their payroll in-house.

One such organization is a client of Soft Trac with approximately 150 employees. According to their Finance Manager, it made sense to study the differences between continuing to outsource versus bringing their payroll in-house. The study revealed that their payroll service was providing the core payroll services, but their accounting staff was still spending time in preparing the time records, maintaining employee information, reconciling payroll reports and doing journal entries.

On examination, they found that the Sage MIP Fund Accounting payroll module would allow their organization to take closer control over their costs while producing their own payroll. The MIP payroll provided them with options, such as labor hour reporting, integration to Allocations and Bank Reconciliation, and the ability to easily manage accrual entries. The Direct Deposit module allowed them to provide their employees with the same service as their payroll service company. In addition, they found that MIP payroll’s integration with Aatrix Software automated the federal and state tax reporting and eliminated the worries of manually filing tax returns and year-end tax forms.

In the final conclusion, their study revealed an annual cost savings of over $13,000. The cost savings they will realize in the first year alone, paid for them to add the payroll module with direct deposit and a fully integrated HR module.

Annual cost of payroll service (excluding inflation) $15,000
One-time Cost of MIP Fund Accounting Payroll Module,
Direct Deposit and Sage’s New HR Module $10,900
Annual Maintenance & Support Cost $1,300

Want help conducting your own cost analysis? Call Susan Campbell at 207-621-8556 for assistance. For more information about Sage’s MIP Fund Accounting Payroll or the Sage’s New HR Module, call Sandy Sherry at 207-221-6575 or Susan Campbell at 207-621-8556.