By Lorna Keogh, Senior Digital & Marketing Operations Specialist at Sage
When choosing a payroll software there are a number of things to bear in mind to ensure that you find the right solution for your needs. Many of these will be standard considerations but there will be some that are unique to your business needs and the industry in which you operate.
So – where to start? Let’s start with the most obvious factors and work from there.
1. Number of companies and users
In essence – how many different companies will you need to process payroll for? It will be important to ensure that any software you purchase includes a licence for the required number of companies. Likewise if you plan to install the software on a server to allow multiple users to access it from a local or remote network, ensure you choose a software package and licence that allows for this.
How many employees do you need to process payroll for this year? When working out this figure include seasonality and any resulting staff. Also include starters and leavers because if someone leaves, their details will need to remain on your payroll software for the year as they will need to be included in year-end reports. Many payroll solutions will be priced and divided out by employee number bands so it is important to have this figure in mind when researching potential suppliers.
3. Payroll Frequencies & Types
How often do you need to pay employees? i.e. weekly, monthly, every two weeks? Also – does every employee get paid in the same manner or do you have for example some employees who are paid monthly and some who are paid weekly?
In terms of the type of payroll are employees paid a salary or by the hour or have you a mixture of both? Ensure to check that any potential payroll solutions can cater for the payroll frequencies and type of payroll that you need. Also consider how employees holidays are calculated – do they get a set amount of days a year, a third of the working week or a percentage of hours worked? If tracking holidays is currently a manual task, check which payroll packages can help you to manage this.
Will you be printing out payslips for employees? If so what stationery will you print them on (plain paper, standard payslips or customised payslips?) and how much will this cost you per week/month/year. Will you choose security payslips or will you need to also purchase envelopes to place regular payslips in? Do you need to post payslips out to employees? Again factor in the costs of postage and envelopes.
Alternatively would you prefer to email payslips to employees? If so, will the potential payroll solutions you are considering allow you to email them securely?
5. What level of analysis you need
Do you need to analyse your payroll costs across different departments in the business? Do you also need to assign payroll costs to different cost centres within the business? If so ensure that any payroll software you consider can handle the level of analysis you require and can produce reports based on this.
Aside from standard payroll law, are there any other pieces of legislation that the company you will be doing payroll for need to comply with? If so it is important to factor this in to ensure that any software packages you consider will be legally compliant. One example of legislation that may need to be catered for by a payroll package would be the construction workers pension scheme.
Is there an accounts package that you want to link your payroll software with? Do you need to import information to your payroll software from spread sheets or from another piece of software? Do you need to integrate with a clock in or biometric system? These are all areas for consideration when choosing your payroll package. Check with suppliers to see what integration or import features are available.
8. What have you used before?
Have you previously used any payroll packages in employment or on training courses? If so how did you find them and would you consider using them again? If so, using a software you are familiar with will allow you to hit the ground running. If not, think about why so that you can ensure that your next package will do what you need.
9. Do you need to be mobile?
If you need to process payroll from various locations or would like to have access on the move from mobile devices a cloud payroll software could be for you. As well as giving you access from anywhere cloud packages will usually be pay monthly, allowing you to spread the cost of your software and to avoid a large initial outlay.
10. Can you try before you buy?
If you are considering a variety of payroll packages especially those you have not used before, trying it out before you buy can allow you to evaluate it against your requirements and will give you peace of mind that what you choose will work for you. Many providers will offer a trial period which will allow you to test out and use software before committing to buying.