Buyers Guide

Our Guide To Payroll Software 

So what is payroll software?

Payroll software is computer technology which automates the process of payment from a commercial enterprise to its employees.

It is typically purchased as part of a larger Enterprise Resource Planning (ERP) software package, or from a provider of human resources-based technology. Payroll software is used internally by organisations and also by payroll service providers which allow companies to outsource their payroll processes.

There is a wide range of functions which are covered by payroll software, which we will detail in this Buyers' Guide. They include the calculation of employee pay taking into account deductions and withholdings, the generation of tax forms and the processing of direct deposits. Some payroll software is also capable of printing cheques.

Payroll software is considered by experts to be more efficient than manual payroll processes, saving time and decreasing the risk of error.

In this Buyers' Guide, we will take a look at some key features of payroll software, as well as detailing its benefits and assessing current trends.

Key/common features

If you are in the market for payroll software, it can be useful to know the key features typically incorporated into these packages. You may require all or some of them, but you should be aware of the common components which make up payroll software packages:

- Reporting - there are many elements of the payroll process which might require you to produce reports for government agencies such as HMRC. Payroll software can offer the ability to create reports automatically; seamlessly making deductions for purposes such as national insurance, income tax, or social security payments.

- Direct depositing - payroll software allows you to pay your employees directly, typically into a bank account of their choice. It can be automated to make payments on a set date at the time of your choosing. Deposits are paid automatically in a safe and secure manner.

- Self-service - some payroll packages now offer the opportunity for organisations to allow employees to log in and view information pertaining to their pay. This might be particularly attractive to large, multinational organisations which wish to lighten the workload on their HR department by reducing the number of employee queries.

- Mobile functionality - HR professionals or other staff operating payroll software can now benefit from mobile integration. This can allow them to process payments or carry out admin from a smartphone or tablet when they are on the move. For payroll software administrators who are accustomed to multitasking, this can be useful.

- Technical support - many packages now offer a live support function, which can be particularly valuable to organisations running payroll software internally, in their early stages of adopting a new system. Any task which requires technical expertise can benefit from the input of technical experts representing the software provider.

- Time card information - if you are an organisation whose employees 'clock' in and out each time they begin or end a work shift, the ability to align this process with your payroll software is crucial. Packages offer the ability to collect information from time cards, potentially making the automated reporting and payment process even easier.

Benefits

So now we have seen the key features of payroll software, what about its main benefits? Below are some of the reasons why payroll software adoption has grown in recent years:

- Cost effective - payroll software allows organisations to take control of their own employee payment process, significantly reducing the workforce needed to conduct payroll tasks manually, with overheads being slashed as a result. Time which would have previously been spent on payroll tasks can now be diverted to core business duties, ultimately offering the potential of a positive impact on the bottom line.

- Accuracy - errors which crop up in manual payroll processes can cost companies money, and also potentially land them in hot water with the authorities. Proven payroll software can act as a safety net in this regard.

- Security - with the threats of fraud and online scams increasing, payroll software offers a secure way of transferring funds directly to the accounts of employees. This can help an organisation fulfil their responsibility when it comes to making payments, and also add to employee satisfaction by giving them peace of mind.

- Reliable tallying of taxes - payroll software can automatically calculate employee taxes such as Pay As You Earn (PAYE), deducting the required sum with no action needing to be taken by a software administrator. This saves time and is an element appreciated by employers and employees alike.

- Integration - another huge time saver is the ability to view several different information strands pertaining to an employee - in many payroll software packages, this can include annual leave, performance figures and sick pay, in addition to standard salary information. In some cases this allows an organisation to forgo purchasing another type of HR software package, as they are able to manage the majority of elements they require via their payroll software.

Current trends

So what are the trends that are currently emerging? The Cloud can certainly be seen as revolutionary in the development of payroll software. There is now a huge range of Cloud-based payroll software packages available, and with these 'software as a service' (SaaS) offerings, prices have now come down to a level at which even the smallest of SMEs are able to operate highly efficient and professional payment processes.

Employee engagement with their own payment information has been increased significantly by mobile communication, and smartphone applications provide workforces with a direct route to access the details which they need. If they cannot answer their own questions using these payroll apps, they can also now communicate easily with HR departments via the same mobile platform.

Added analytics functionality is another payroll software function we are seeing more of, and this is feeding important information to senior figures within organisations, helping them in decision making and shaping business strategy. Whether it is considerations such as levels of employee remuneration, retention or training - they can all now be informed by the accurate reporting of payroll software.