Payroll management is one of the fundamental aspects of running a business. Happy employees, accurate tax filing, and regulatory compliance all boil down to efficient payroll operations.
However, payroll management has always been a tedious task, involving a lot of paperwork and repetitive procedures. Payroll software solutions can help you overcome this hurdle.
In this guide, we’ll help you select the best payroll software for your business.
What is Payroll Software?
Payroll software is a computer program used by the human resource management (HRM) department to manage payroll operations. It automates and optimizes the entire payroll cycle in an organization, ranging from facilitating accurate salary payments to ensuring flawless compliance.
Why is Payroll Software Important?
Payroll goes way beyond calculating and processing paychecks. From adding new employees to the payroll to maintaining years of records, payroll management includes a series of recurring, tedious, and time-consuming tasks. A payroll management system helps HR professionals keep a check of all payroll operations, thereby ensuring enhanced accuracy and efficiency.
With the role of HR in continually growing, organizations understand the importance of HR software. As a result, the global HR payroll software market, which was valued at $4.8 billion in 2018, is set to reach $9.3 billion by 2025, showed a study by Stats and Reports.
How to Choose the Right Payroll Software for Your Business?
The benefits of using a payroll system are substantial. It automates your payroll process, increases accuracy, and helps you become more compliant. But leveraging the benefits of payroll software starts with selecting the right software.
Here’s a quick checklist to choose the best payroll software for your business.
1. Define Your Requirements (Clearly)
Every company wants to optimize its payroll operations. But with that idea in mind, you won’t be able to utilize payroll software capabilities. It’s essential to define your business payroll requirements in detail.
Consider these following factors:
- Number of employees
- The size of the business
- Payroll budget
- Payroll frequency
- Payroll process
- Other needs (employee management, performance management, etc.)
Evaluate the above factors to create a payroll software strategy.
2. Seek Powerful Analysis
A payroll system should generate accurate reports that provide an insight into payroll summary, contributions, deductions, tax liability, and more. Find a solution that can handle your organization’s reporting and analysis requirements across various departments.
3. Watch Out for Legislation
See if there is any legislation or regulations you need to follow. This can include national policies, state regulations, and local laws. Make sure your payroll software is legally compliant with all the rules and regulations, to ensure you don’t end up paying hefty penalties.
To learn more about payroll regulations, check out the payroll guides of more than 130 countries by CloudPlay.
4. Delve Deep into Payroll Software Features
Here’s where the real search begins. Hundreds of payroll solutions are available, with all offering different features and functionalities. But at its core, the purpose of payroll software is to make your payroll operations more efficient and compliant.
Therefore, start by looking for the essential payroll software features, such as:
The software should automate your payroll tasks. You should configure it to send paychecks of specific amounts to employees at a defined date and time. A payroll solution should also have a direct deposit feature to streamline salary payments.
A payroll system should simplify and automate the documenting and managing of payroll taxes. It should generate and file taxes to help you manage deductions stay compliant with tax laws.
Every payroll and HR solution should include an employee self-service portal. Employees should be able to manage their personal data, clock-in and clock-out times, attendance, and leaves by themselves.
In this digital age, data is the new fuel. Make sure your payroll software generates payroll and tax reports that provide a detailed insight into your HR operations. Robust reporting and analytics features can help you make better and more informed decisions.
Gone are the days when HR professionals had to spend hours on their desks, gawking at their computer screens. Payroll systems now come with mobile capabilities that allow HR managers to access their tasks and operations anytime and from anywhere. Therefore, look for a payroll solution that offers mobile access.
Implementing a payroll system means you’ll be using it to store and manage all of your organization’s sensitive information. This includes employee details, bank details, tax information, etc. So, it’s vital to find a payroll system that comes with robust security and encryption features.
Payroll isn’t the only thing an HR department does. From recruiting and employee onboarding to performance management and training, there’s a lot on the HR teams’ table. A lot of HR software vendors provide comprehensive solutions that include all HR capabilities. But even if you’re going for a standalone payroll system, make sure it integrates with other HR and enterprise platforms like PMS, ERP, and online accounting and billing software for businesses.
5. Decide on a Budget
Once you’ve determined the features you need, decide on a budget. The ultimate purpose of a payroll system is to make your payroll operations more cost-effective. But opting for an overly expensive solution can affect your bottom line.
So, set a budget that fits well within your operational budget. At the same time, it’s also essential to avoid the cheapest available options. Your payroll software will play a pivotal role in your company’s compliance and overall success, so set a budget accordingly.
6. Utilize Free Trials
By now, you must’ve created a list of payroll software solutions based on your requirements and budget. Now, start testing each platform one by one. The best payroll software vendors, like Gusto and Wave, offer free trials, so you can check their functionality.
Make use of the free trials, and evaluate all the features. See if it’s integrating well with other tools like ERP, invoice receipt maker app for Android and iOS, and PMS.
To conclude, it’s all about the bottom line. Find a solution that aligns with your business strategy and helps your HR team become more productive and efficient. But at the same time, keep an eye on the cost and features to make the best decision.