How Can Businesses Choose The Right Payroll Software?
Paying accurate salaries to your employees on time should be a priority to thrive in the current business world. However, it is not as easy as it seems. HR managers often face complexities in managing workforce salaries. Companies desperately need effective solutions to optimize the payroll process so that they can save some valuable time spent on repetitive tasks. Technology can be an effective solution for that as it is revolutionizing modern business practices.
The role of technology has evolved with changing times, and we admit that modern technology has both pros and cons, but it assists businesses greatly. Therefore, the cons should be overlooked as time is the greatest asset one can have, and time savings are only enabled with automation. HR managers are also leveraging automation solutions to increase process efficiency and save considerable time.
The payroll software works on the cloud and automates salary calculations, payslip generation, records management, and compliance-related tasks. Therefore, it is a must-to-have thing to enable accuracy. Numerous companies provide robust systems, but unfortunately, very few can excel at making the work easy. So, the selection process becomes confusing, and the software subscription amount is significant. Therefore, the decision shouldn’t be made in a hurry. Here, we have mentioned some steps to help you in choosing the best system:
Steps To Follow For Choosing The Correct Software
Understand Your Basic Payroll Needs
Before researching different payroll systems, get a clear idea of what your business will need in terms of features, costs, size, ease of use, and durability. Also, consider your business industry, payroll type, pay frequency, workforce size, and legal requirements. Below are some other points to note:
- Number of seasonal/temporary employees
- Payroll budget
- Employee benefits and schemes
- Method of depositing salaries
The above-mentioned points will help you to outline the organizational needs. The systems with all these features available should only be considered so the selection criteria get narrowed.
Ensure That The Systems Are Enough Capable To Fulfill All The Needs
The image shown above defines the major features that should be included in a payroll system.
Once you have determined your needs, then you should check if all the shortlisted software are suitable for your organization or not. First, you should evaluate the features different providers offer and their efficiency. Some standard features you should check are mentioned here:
- Salary Structure Configurations: Ensure that the system allows you to configure the salary structure and calculation methods yourself. Check if it lets you create multiple pay groups for different employees, teams, and departments.
- Payment Scheduling And Reminders: Once the salaries are calculated, payments also take time, and the manual process would take considerable time to deposit. So, check that the systems offer advance payment scheduling, making the paydays easy. Some providers just enable salary reminders for managers to alert them about the dates, which can also be helpful.
- Attendance And Performance Data Integration: Numerous software links employees’ attendance and performance data with their salaries so that the business can ensure higher accuracy. Either the system will integrate with attendance and performance management software to collect the data, or you can use all-in-one HRMS solutions to manage everything in one place.
- Payslips: Check that the concern of generating salary slips is solved with your system. Usually, the software providers offer multiple options to select the particular salary slip format. And the system also makes the slips available to the staff.
Apart from these common features, there are many additional features you should have in your system:
- Tax Compliance: One of the payroll process’s most complex and time-consuming aspects is following taxation and regulations. So, prominent systems enable tax filings and payments to ease the work. Also, they update the latest regulations and laws in the system to help the business stay compliant all time.
- Multiple Payment Types: Apart from salaries, the software needs to handle other employee payments, such as bonuses, arrears, reimbursements, commissions, and employee benefits.
- Reporting: Business cost analysis is a must to keep track of cash flow. Employee salaries are one of a company’s biggest expenses, so its analysis is necessary. Payroll software comes with reporting capabilities that help managers to get important insights into the data.
Go For Free Trials
Once you have gone through the features and additional offerings of the vendor, you can eliminate some more names from the list. After that, here comes the stage of evaluating the system to check whether it is efficient enough as it seems. As subscribing to a system is not a small expense, you should first use it to ensure it is easy to use.
To evaluate the system, you should take a free demo or trial before purchasing to check whether it suits the requirements and is easy to use. However, access and features provided in free trials are often limited, but they are helpful enough to finalize the choice.
Determine A Budget
For medium and small businesses, the budget will be the most critical part of the decision-making process. Therefore, you should fix an efficient budget amount that can help you make the final choice.
To determine a budget, you should consider the current expenses of the salary process, such as managing records, paying payroll executives & taxation consultants, and doing the accounting entries. Furthermore, it would be best if you did a calculation of all expenses the software will eliminate, so you can decide what amount should be paid against the costs saved.
You should also understand the standard pricing policy software vendors follow to make an accurate decision. Usually, there is a base fee that includes the prices of major features, and then comes taxes levied by the government. Apart from these, some software charge users on the basis of payroll runs, employee count, or additional features. Based on the software type, some vendors also charge setup and installation fees.
Read Customer Reviews And Make A Choice
The list gets narrowed further as many options get eliminated which exceed the budget. After that, customer reviews help to make a precise decision as it provides you with advice from the customers who have used/are currently using the system. This will help you know the pros and cons of subscribing to a particular system, and software with an excessive number of negative reviews needs to be re-evaluated.
Once all these steps have been finished, you can make a final decision about which system to purchase. Select the best suitable option that matches your requirements, budget, workforce needs, and business type.
Payroll automation is a necessity for business managers as it saves them considerable time and enables high efficiency. Additionally, accurate salaries lead to increased employee satisfaction, so the churn rate gets reduced also. As payroll software plays a crucial role in determining the overall success of a business, it is necessary to choose the software wisely. The above steps are primary and can be helpful to business owners in making the right choice.