Choosing the right payroll software is crucial, and you will find several options available. Here we are presenting the latest updates about them:

On-premises software: These are installed locally, offer greater control, but require capital investment and IT support. Companies with large IT teams and sensitive data opt for this choice.

Desktop software: These are software that are deployed on company desktop computers. Mostly these are preferred by small businesses. These can help in generating payroll but are error-prone because the involvement of Excel sheets and merging data from various sources results in miscalculations.

It also has limitations in integrating with modern solutions. Compliance must also be regularly updated by the admin or HR.

Cloud-Based Software: These software are accessible via the internet and are continuously updated and upgraded by software vendors. So capital investment is nil.

It is the best investment for progressive smaller firms. These SaaS-based software are charged as per employee number in the organisation. So you can use the best of technology at a smaller investment. And when you grow, you can opt for advanced features.

This is the most confusing stage if you wish to invest in payroll software. Because almost all payroll software vendors claim they are the best! And everyone seems to have the same feature list.

And interestingly, when you enquire about the brands which seem to be leaders, they often fall short in feedback. Because they are mostly generic solutions that fail under unique scenarios.

So how to choose the payroll software vendor that is really suitable for your needs?

Here are our suggestions–

• Make a team of evaluators.
• Create a list of challenging payroll scenarios for your organisation. Let us repeat: all payroll solutions will work well under standard scenarios. The real test lies in special requirements.
• Don’t just ask for a generic demo. Ask the vendors how their software will address your tough scenarios?

Pay special attention to these aspects —

• Rule engine– While all features look the same, the real depth and difference are created by the flexibility and power of the rule engine.
• Micro-features and depth of software capability– To assess this, ask for a scenario-based demo. That will highlight the strengths of a software. And will also expose shortcomings.
• Scalability and customisation of payroll system— Scalability is not just about increasing employee numbers. When the organisation grows, many new HR scenarios emerge. And new modules are needed. Keep an eye and ask questions about how the software vendor will handle them.
• Specifically ask if the payroll software provider does customisation. Also ask for the cost of such customisation. This is the area where many clients migrate from other vendors to us.
• Flexibility— This one is more about the HR domain. Many times HR gets unique scenarios, and software are unable to handle these. So payroll is delayed. Ask vendors how flexible their software is to handle such situations.
• Customer Support– Payroll is a complex process, and support is needed continuously. Not just technical matters, but also new scenarios need support. Payroll generation is a time-sensitive process, so rapid solutions are sometimes required. We specifically suggest that tele-support is a must for HRMS and payroll solutions.
• Compliance– All software vendors handle compliance differently. In many of them, especially desktop software, the vendor supplies new compliance updates from time to time, and HR and admin need to update their software. This causes errors.

Or software must be updated with new patches. But advanced cloud payroll software like OportuneHR gets updated regularly, and automatically when new guidelines are released. So you are always up to date with compliance.

The effectiveness and efficiency of payroll software depend on a well-planned implementation process. Here, HR domain understanding of the payroll software vendor counts a lot. A good implementation can have a transformative effect on the efficiency and morale of your payroll team.

In larger organisations the HR team has expertise to take on implementation on their own. But in small businesses, it becomes tedious because the HR team may need support.

So ask:

• Who will do the implementation?
• What role and responsibilities will the payroll system vendor play? Especially: Who will configure the rule engines for your industry and organisation requirements?
• What would be the onboarding and training process?

One very crucial point: Be aware of how many days it will take for the payroll software to become fully operational in your organisation!