With a diverse and decentralized workforce, it can be challenging to calculate the correct pay for all your employees.
Before the technological advancements of today, most paychecks were prepared and calculated manually. Nowadays, thankfully, companies tend to use payroll software regardless of their size or workforce. This tool is an essential factor in ensuring that no errors occur for every payroll and that all paychecks are properly distributed and accounted for. All in all, it can help automate time-consuming processes and free up valuable time for your HR team.
Payroll companies create software solutions intended to monitor and store information regarding employees’ pay rates, deductions, and other details that are essential to ensure correct accounting.
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What does payroll software do?
For a payroll solution to come up with accurate compensations, rewards, and deductions for employees, it must perform other equally important functions first. These tasks are all part of payroll processing.
A payroll software’s primary task is to compute employees’ deductions and net income.
The first step in this process is to identify the gross income of an employee. After this, the tool determines and subtracts taxes, retirement savings, insurance, and other deductions from the gross income. Whatever is left after this is the amount to deposit to the employee’s bank account.
A payroll software solution is an efficient record keeper.
Manually storing files, such as employee pay rates, contracts, work hours, and deductions, is not only physically taxing but can also take up quite a lot of space in the office. In order to free up both space and your workforce, payroll software can be a good solution.
Additionally, integrated payroll systems will allow businesses to combine both payroll and HR systems, which can be a great benefit for busy organisations.
Payroll software makes the work of HR managers easier.
Most online payroll services usually offer options for employee self-service. This means that employees have the freedom to check details of their pay rate, benefits, required work hours, and other types of information themselves. This allows employees to review details and ask for editing when needed, thereby making the work of HR much easier and ensuring that errors are prevented.
Benefits of Payroll Software
Shifting to an electronic payroll system can bring numerous advantages to companies. The most important of these, however, is an improved process that eliminates inaccuracies and other human-made errors in your system. In addition to this, the solution is highly convenient as it frees up the time of your HR and payroll personnel. This means that businesses will no longer waste time, money and efforts – rather, they can focus their attention on more important tasks.
Finally, using payroll software will help businesses better fulfil compliance requirements, particularly those in relation to taxes. The UK payroll system, for example, can be quite complicated. But by using the right payroll software, you can streamline your processes and ensure that you’re fully compliant.
Find our guide to Top 3 Zoho Books Alternatives with Integrated Payroll here.
9 Features to Look for in a Payroll Software
There are a plethora of payroll and accounting solutions available on the market today. While competition is arguably a good sign, it can also make it a bit more challenging to choose the right solution for you.
Are you not entirely sure what you’re looking for? No worries, our software experts have gathered up a quick cheat sheet covering which features you should look for in your next payroll software. Let’s go!
Your payroll solution should easily integrate with your existing systems
Does your company already have an accounting solution in place? Do you have an employee database or a robust HR system? If you do, it’s absolutely essential that you choose a payroll solution that lets you integrate these existing systems into one.
Choose a payroll system that is scalable
Regardless of current size or industry, there’s always a chance that you will expand and hire more employees further down the road. This means that you need a solution that’s highly scalable – one that you can continue to use effectively even if your workforce increases. Ideally, your chosen software will allow you to be scalable both ways – up and down.
Your solution should cater to your requirements
If your business has specific demands or belongs to an industry with specific requirements, it’s imperative that you choose a payroll system that caters to this aspect.
For example, imagine that you’re in the sales industry. This means that your payroll system should most likely offer features for sales rewards or bonuses. If you’re in the hospitality or restaurant industry, you should choose payroll software that integrates tips into the compensation system.
Choose a provider with a tax compliance team
When it comes to tax compliance, the rules are ever-changing. This means that you can benefit greatly by choosing a payroll provider that has a well-trained tax compliance team in-house. These experts will stay updated on recent developments in tax regulations, and ensure that your tax data are accurate and free of errors.
Find a provider that offers data conversion features
This is an important feature if your business is already running on other software solutions. Essentially, this can ensure that all important data will be properly migrated and converted into the new software – thereby ensuring that you don’t lose any historical data!
Choose a cloud-based payroll solution
Choosing a cloud-based solution can be incredibly convenient – especially if your organisation is spread across cities and countries. Cloud technology gives you and your employees easy access to the solution no matter where you are. It’s also a wise option if you want to save on costs as cloud-based solutions are normally billed monthly based on your usage.
Does the software have proper training and support features?
Always check the training and support options available before you purchase a solution. Will the software be easy to understand? Will it be easy to use for staff members with little technical knowledge?
We recommend that you always choose software vendors that offer both online and onsite training – after all, this is so that you can get the most value out of your solution!
Choose a software that fits your budget
Payroll software vendors offer several different pricing options. But which option is right for you?
Our software experts recommend that you set up a list covering features you definitely need from your solution – and then add the additional features you would like it to include. Following this, you compare 3 or 4 available solutions and discover which features will be included in a package within your budget.
Which solution will offer the best match for your requirements?
Find the solution that offers the ideal experience: budget, convenience and ease of use
Finally, it’s essential that you choose a system that fits your budget, is easy to install and use, and which gives you the features you need the most. Don’t make the mistake of choosing a well-known and complicated solution that will only drain you of time and effort. Remember that the best user experience often breeds the best results.