10 things to consider when choosing payroll software

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The best payroll software helps to streamline processes while being secure and compliant, making it a valuable investment for improving operations. That’s why it’s important to choose a solution carefully, based on how it can meet your business’s requirements and capabilities.

Read on for 10 things you should bear in mind when choosing payroll software.

1. Your company’s unique requirements

Business type

Your business type impacts your payroll requirements. For example, intermediaries require the ability to invoice employees on behalf of several employers. Consider the unique requirements of your industry, including hospitality, accounting, and construction. Make sure the payroll providers you’re considering offer industry-specific payroll needs such as the Construction Industry Scheme (CIS) and the reporting subsequently required by HMRC. The software should also be suitable in terms of size, whether you’re a small business or an enterprise.

Your ambitions

With success comes growth, and your systems should grow with you. A scalable solution will mean you won’t need to switch provider unexpectedly, and you can rest assured your changing requirements will be met.

Number of employees

Consider how many employees are currently on your payroll, their individual payroll requirements, and the number you anticipate for the year ahead. The bigger the number, the more robust your payroll software will need to be. Bear in mind that your number of employees is a key factor in the price you’ll pay.

Employee types

You also need to think about employee types, including full-time, part-time, and seasonal workers. A complex payroll can be simplified if bulk processing is available.

Number of companies

If, for example, you’re an accountant or umbrella company, you’ll need to process payments for multiple companies at once. This means the software you choose must be able to handle multiple employers and agencies. Some options even include time-saving automation features that utilise artificial intelligence.

Payment frequency

Your payroll software will need to be compatible with your required payment frequencies. This may be weekly, fortnightly, or monthly. The way you pay employees with different frequencies may also be bespoke. Ensure the software you choose supports your payment needs.

 

2. Required functionality

Your previous experience

If you’re familiar with some of the solutions out there, it’s important to weigh up what worked well and what didn’t. Maybe you loved the simplicity of the interface but disliked the lack of support when you came across something tricky. Knowing what your pain points are and what functionality you need will help to narrow down your options. Weigh up the pros and cons in terms of what features are most important to you.

Reporting capability

Most payroll providers offer built-in reporting suites, however, it’s worth considering your internal requirements. You may require specific reporting formats, exporting abilities, or even custom reporting. Make sure to ask if the reports that are crucial to your operations are included or if there are provisions to add these as part of an agreement, plus expected timeframes.

Presentation of payslips

Do you print your payslips or provide them through an online portal? If customisable payslips are a must, you’ll need to check what bespoke options are available. Think of your end user, would they be able to access their payslips through the solution with ease?

 

3. Your budget

Investment over time

Each provider will have different payment models, including subscription-based and fixed fees. Ask whether there will be any additional costs, including support, to ensure your quotes are accurate. Cost is the easiest way to narrow down your options, as you’ll be able to weigh up functionality with investment.

Employees in a meeting

 

4. Ease of use

User interface

How experienced is the intended user? Ideally, there will need to be a good balance between functionality and simplicity. Ease of use is an important consideration when you’re introducing new systems into your business

Logins

If you process payroll for multiple companies, the easiest way to do so will be with one login. In fact, signing in and out for each company is a common pain for accountants. Check any limitations on access, including user licenses.

Bulk payroll abilities

Modern payroll software sometimes offers bulk processing. This can include bulk payments, communications, updates, and so on. If you have a large number of employees, this will greatly speed up your operations.

 

5. Employee-friendliness

Employee self-service (ESS)

If needed, find out if and how employees can download payslips and upload timesheets. The satisfaction of your workforce is an important consideration when choosing payroll software. This means it must be secure and easy to navigate.

 

6. Technological requirements

Cloud-based or on-premises software

A key decision is whether to choose cloud (accessed through a web browser) or on-premises (installed on a server held on your premises and accessed through each computer connecting to that server) software. Cloud-based payroll software is an increasingly popular choice for companies due to its security, speed, and convenience. However, as the cloud relies on internet, on-premises software may be more suitable if bandwidth is limited.

Technology limitations

If you choose on-premises software, it needs to be suitable for your existing hardware in terms of storage and operating system, plus any changes you make in the future. For example, introducing Apple devices may not be supported by your existing on-premises infrastructure. Cloud-based software must be compatible with your browser of choice and broadband capabilities. Any potential limitations are worth discussing with stakeholders in case business change is required.

Integrations

Are there any important applications your payroll needs to integrate with, for example HR or point of sales systems/CRMs? If so, check whether the solution offers this ability.

Search engine open on laptop

 

7. Ongoing support

Support package

Software requires ongoing support in the event of any uncertainties or technical bugs. Find out what level of support is provided, including what this covers and any associated costs. It’s also worth knowing who you’d have access to – whether that’s a dedicated account manager or a support team.

Patches and updates

You should always be running an up-to-date product that meets security and legal requirements. Payroll software should include ongoing patches and updates to improve the product. On cloud-based systems, these should be pushed automatically. Seek confirmation on whether updates will be included in your costs and support package.

 

8. Compliance with legislation

The provider

Does the provider employ tax experts to ensure you stay compliant? This is something to consider during the sales process for assurance that the product will always meet ever-changing legislation.

 

9. Speak with others

Word of mouth

If you have connections who use payroll software, it’d be worth opening up a discussion. Are there any you should avoid – and why? Don’t be afraid of newer software either. This is often developed to ease the pains of established products and offer a fresh perspective. If you’re considering lesser-known software, ask for testimonials to see how it could benefit you.

 

10. Try before you buy

Free trial or demo

There’s only so much you can gather from reading about a solution. If one appears to suit your needs, ask for a free demonstration or trial. From there, you’ll be able to negotiate pricing if it’s a good fit.

 

Download our step-by-step guide to choosing payroll software

Our handy Payroll Software Buyer’s Guide eBook will guide you through the process of finding the right solution for your business. Download it for free today.

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