In 2007, it's clear that payroll processing has become better, cheaper and faster - particularly at the small-business end of the marketplace.Companies like Intuit and Sage are building payroll into their accounting products for all but the very tail end of the market, while Sage, Thomson and Microsoft are beefing up their ERP and human resources offerings for the mid-range and enterprise markets.

So while the major trends in payroll - more electronic forms and filing, the migration to online processing and reporting, and simplified data entry - continue to improve the category overall, what will become of the stand-alone vendors? Consumers who have payroll bundled into their accounting software are unlikely to pay more for a stand-alone product unless there are truly compelling features or unique attributes.

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