Replacing your payroll processing software

MYOB recently announced that it will shortly cease supporting its long-lived PowerPay payroll software.

Such announcements can cause alarm – payroll software is typically long-lived and tightly integrated into the day-to-day operations of many businesses.

This is because payroll software is not just about paying staff. It is also used to maintain employee records; manage attendance, leave and benefits; process tax and superannuation obligations, and to manage temporary and contract staff.

What do you need to consider when replacing your payroll processing software?

Number of employees

Although, no one size fits all, payroll software can be grouped by the size of the business. For example, PowerPay targeted smaller businesses, often with less than 20 employees. In general, payroll software can be classified in the following way:

  • Smaller businesses (less than 20 employees)
  • Medium-size business (20-250 employees)
  • Enterprise solutions (250+ employees, spread across different countries)

Features

Software features need to be matched to the current and, as best as can be anticipated, the future needs of your business. Features you need to consider include:

  • Maintain up-to-date employee records;
  • Record leave entitlements;
  • Handle varying pay rates and incentive-based payments;
  • Record payment of superannuation entitlements;
  • Manage taxation responsibilities and file tax forms;
  • Automate pay slip notifications and leave calculations.
  • Management reporting to track trends and labour costs;
  • Allow different methods of payment – cash, cheque and electronic.

Integration

The system should integrate with your other payroll-related programs, such as accounting software, time and attendance systems and human resources software.

Price

Like most things in life you tend to get what you pay for. The price of payroll software tends to rise as you add more features and users (licences).

You will also need to budget for ongoing support costs, training, and periodic costs related to upgrading to new releases.

Support

You will need to consider ongoing support such as access to on-site technical support, phone-based help and regular training and updates. Look for providers that have proven track records in customer service and support.

Flexibility

Ensure that the system can be configured to the specific needs of your business. This means avoiding ‘workarounds’ that make future updates costly and time-consuming to apply.

Scalability

As previously mentioned, payroll systems tend to have long lives and are often tightly embedded into business processes – making it disruptive to move to a new one.

You need to consider your future needs. Try to envisage what your business may look like in five years time. Does the software have the ability to grow with you? Can it handle multiple locations? Can you quickly add new users? Are updates available online?

It is worth considering systems that are modular – allowing functionality to be seamlessly added.

Security

As well securely storing your data, the system should give you the ability to allow or deny access to any part of the system according to the user’s need.

Deployment

You don’t want to miss payments or have to recreate lost data. You need to ensure that the migration of existing employee data from your old system is clean, and the switch over to your new system is seamless.

Payroll projects can be complex. It is advisable to invest in professional implementation and training, but you need to consider these costs when buying the software.

You also need to be realistic about time frames for implementation. A payroll deployment may take three months or more to complete before moving across to the new system.

Conclusion

A new payroll system can save you time and money. Search for one that can grow with your business. One that is flexible, has the right features to meet your needs and is compatible with your existing payroll-related systems.

For more ideas on replacing your payroll processing software please contact Acacia Consulting Services.

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