Cost Comparison of Using Microsoft Dynamics GP for Internal Payroll vs. ADP Outsourced Payroll

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When someone is considering purchasing Microsoft Dynamics GP the question can arise – should I use the payroll module* from Microsoft Dynamics GP or continue to outsource to a payroll company like ADP? (*Note, Payroll used to be a separate “a la carte” purchase but is now automatically included in the cost of Microsoft Dynamics GP accounting software.)

No matter if you choose to run your payroll in-house or with a partner like ADP, you still need to sit in front of a computer screen and enter employee records. It  just depends on if you are entering the information into a Dynamics GP screen or ADP screen. Same typing time.

But if you choose to run payroll in house there are 3 extra steps on the screen. You have 1)calculate checks 2)bill checks and 3)print checks. May sound like a lot but these 3 functions typically take no more than 1 to 2 hours.

“But ADP will file my taxes,” you may retort.  This is true. We all hate doing taxes.  But if you purchase a one time add on to Dynamics GP called Greenshades, then the taxes are done for you in house also. All you have to do is mail the check to the IRS. (admittedly, an important step you don’t want to forget!)

We estimate that on average a company that pays 300-400 employees running payroll in house will spend approximately 3-4 extra hours per week vs. paying ADP to do the payroll for you. Is it worth it?

We have one client, a staffing company in New York City,  that processes 800 payroll checks weekly. They used to pay $205,000 each year to ADP.  Then they purchased the Dynamics GP payroll module with Greenshades  for a total of approximately $100,000. A one time purchase at that time.  So they saved over $100,000 in just the first year. (The only way that does not make good financial sense is if they are paying their internal payroll data entry person more than $504 per hour – and if that is the case, sign me up!)

It is always nice to find ways to save time but in this case I think you can see that it can be worth spending the extra 4 hours a week to process the payroll internally. If you think that outsourced payroll is the only option, think again. You may be able to save a substantial amount of money, year over year, for  just a few extra hours a week.

Just to make sure it is clear, unlimited payroll users are now included in the purchase of Microsoft  Dynamics GP 2013. So you can run payroll in house for no additional license
costs. See:

Will you start running payroll in house now?

By CAL Business Solutions, Connecticut Microsoft Dynamics GP Partner

6 thoughts on “Cost Comparison of Using Microsoft Dynamics GP for Internal Payroll vs. ADP Outsourced Payroll”

  1. Nice article which shows the cost differences.......Review what is included in the maintenance plan Microsoft requires for all new customers.

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