10 Factors to Consider while selecting Payroll Software for your Business

When selecting payroll software for your business, there are several factors to consider to ensure you find the best solution.

10 Factors to Consider while selecting Payroll Software for your Business

When selecting payroll software for your business, there are several factors to consider to ensure you find the best solution for your needs. Many of these will be standard considerations but there will be some that are unique to your company and the industry in which you operate.

So, where to begin? Continue reading for ten critical factors to consider and advice to help you make the best decisions.

10 factors to consider when selecting payroll software
10 factors to consider when selecting payroll software

1. Number of Companies and Users

How many different companies will you need to process payroll for if your company does payroll for a number of companies/clients? It is critical that any software you purchase includes a license for the required number of companies.

Similarly, if you intend to manage payroll solely for your company and want to install the software on a server so that multiple users can access it from a local or remote network, make sure you select a payroll software package and license that allows for this.

2. Number of Employees

How many employees will you require to process payroll this year? Include seasonality and any resulting staff when calculating this figure.

Include starters and leavers as well, because if someone leaves, their information must be kept on your payroll software for the entire year in order to be included in year-end reports.

Many payroll solutions are priced and divided into employee number bands, so keep this figure in mind when researching potential suppliers.

3. Payroll Frequencies and types

How frequently do you need to pay your employees? Is it on a weekly, monthly, or month to month basis? Also, are all employees paid in the same way, or are some paid monthly and others paid weekly? It is worthwhile to consider this.

In terms of payroll, are employees paid an annual salary, by the hour, or a combination of both? Check that any potential payroll solutions can accommodate the payroll frequencies and types of payroll you require.

Consider how employees' vacation is calculated: do they get a set number of days off per year, a third of the working week, or a percentage of hours worked? Check which payroll packages can help you manage holidays if you are currently tracking them manually.

4. Types of pay slips to use

Will you be printing pay stubs for your employees? If you say yes, what kind of stationery will you use (plain paper, standard pay slips, or customized pay slips)? Determine how much this will cost you per week, month, and year.

Other considerations include whether you will use security pay slips or purchase envelopes to place regular pay slips in. Is it necessary to distribute pay stubs to employees? Remember to account for postage and envelopes.

Alternatively, would you prefer to send pay stubs to employees via email? If so, will the payroll solutions you're considering allow you to securely email them? Please double-check this.

5. Level of Analysis

Do you need to compare payroll costs across departments in your company? Is it also necessary to allocate payroll costs to different cost centers within the company?

If this is the case, make sure that any payroll software you consider can handle the level of analysis you require and generate reports based on it.

6. Complying with Legislation

Is there any other legislation that the company for which you will be doing payroll must follow besides standard payroll law? If this is the case, it is critical to consider this to ensure that any software packages you consider are legally compliant.

TDS, PT, PF management is one example that may need to be addressed by a payroll package.

7. Integration between Payroll and Accounting Software

Do you want to connect your payroll software to an accounting package? Do you need to import data from spreadsheets or another piece of software into your payroll software? Do you require integration with a time clock or biometric system?

These are all factors to consider when selecting a payroll package. Check with your suppliers to see what integration or import features they offer.

8. What Payroll packages have you used before?

Have you ever used a payroll package at work or on a training course? If so, how did you discover them, and would you use them again?

If this is the case, using software that you are familiar with will allow you to get started quickly. If not, consider why so that your next package will do what you require.

9. Do you need to be mobile?

A cloud payroll software solution may be right for you if you need to process payroll from multiple locations or if you need mobile access.

In addition to providing access from anywhere, cloud packages will almost certainly include a monthly payment option, allowing you to spread the cost of your software and avoid a large initial outlay.

10. Can you try before you buy?

If you are considering a variety of payroll packages, particularly those you have not used before, trying it out before you buy allows you to evaluate it against your needs and gives you peace of mind that whatever you choose will work for you.

Many providers will provide a trial period during which you can test and use the software before making a purchase decision.

FAQ's- Payroll Management System

Que : What is payroll management system or employee management system?
A Payroll Management system is a piece of software that assists companies in automating their payroll procedures. It can support managing tax withholdings, calculating pay, and keeping track of employee hours.

Que : Why would my company require a payroll management system?
A: By automating time-consuming and error-prone tasks, a system can save your company money and time. It can also assist you in maintaining compliance with tax laws.

Que: What characteristics should I be looking for in a payroll management system?
A system should have the ability to track employee hours, determine wages, control tax withholdings, and produce reports, among other things. Additionally, make sure the system is simple to use and offers excellent customer support.

Que: A payroll management system's price is a question.
A payroll management system's price will vary based on the features and functionality you require.

About Jordensky

At Jordensky, we are committed to providing an experience of the highest caliber while specializing in accounting, taxes, MIS, and CFO services for startups and expanding businesses.

When you work with Jordensky, you get a team of finance experts who take the finance work off your plate– ”so you can focus on your business.

Also Read,

Basics of Accounting - Terminologies and Concepts for Business Owners

Step by Step Accounting Performance Evaluation Guide