2024 Payroll Software Buyer's Guide
Payroll is an essential part of every business with employees. As you’re growing your business, you will need to put the right processes in systems in place to ensure that you have a reliable and efficient way to keep your employees paychecks flowing out on time, while also accounting for variable such as taxes and benefits.
Selecting or switching to the perfect payroll software solution for your company involves deep business examination and thoughtful research and analysis of the features and system capabilities that will best suit your business now and scale with you as you grow.
All of these factors can make selecting the perfect payroll software solution for your business seem overwhelming. However, this guide will provide insight and tools for selecting your perfect business payroll software.
What are the Top Payroll Software Benefits?
Payroll software solutions offer a suite of tools designed to help you handle your payroll activities more efficiently by replacing manual (and error-prone) processes with streamlined systems you can automate. Using a payroll software system can also provide your business with other great benefits such as:
Saving Time and Resources: With payroll software in place, you’ll eliminate manual tracking and payments which will help your teams work more efficiently and save time processing payroll. This time can be reallocated to other areas of your business to drive even more productivity.
Offering Employees Various Payment Methods: Most payroll software solutions give you the ability to offer your employees a choice in how they receive their paycheck. You can save preferences in the system to make sure employees are paid using their preferred method each time.
Automating Payment Disbursement: In addition to offering various payment methods, you can also automate the payment disbursement process using payroll software. You can customize for hourly or salary employees and remove a lot of the manual work of calculating hours and paychecks using a payroll software.
Calculating Taxes: Payroll software is designed to automatically apply tax deductions and track payments fluidly so all of your records are updated and ready for tax time, with as little hassle as possible.
Reduce Errors and Limit Liability: Because payroll software helps eliminate errors and automatically accounts for taxes and compliance, you’ll reduce your risk or error and limit your liability.
Reporting: Payroll software solution typically offer reporting tools that you can use to create reports from the data in your system, such as cost summaries and tax remittances.
What are the Top Payroll Software Trends You Should Know?
Payroll software, much like other business software solutions, change and adapt to new market needs in each new version. As technology improves to keep pace with business trends, you can expect to see these payroll software trends gaining momentum:
Cloud Payroll Software on the Rise: Cloud-based software solutions are a continuing trend in business as they offer mobility and flexibility demanded by an ever more mobile business landscape. Payroll software is no exception. More businesses are choosing to embrace SaaS payroll solutions that provide convenient and mobile-accessible tools to support a business on the move. This also means that small companies can afford payroll systems much earlier than in the past, simply due to the lower cost and barrier to entry on a cloud software versus a more expensive on-premise system.
Employee-Focused Solutions are Key: Employee self-service dashboards and mobile access to payroll software solutions are also trending. As a result, payroll software vendors are focusing on providing more employee-focused tools that people can use to manage their time and benefits with their company more seamlessly.
A La Carte Integrations: Another trend forming in the payroll and HR software realms is systems being built to be more al la carte (rather than full suite). This means that you have more flexibility to pick and choose the different tools and features you like best, regardless of the vendor, and integrate them seamlessly together.
So, you could use some components of an HR software you like for administrating benefits and then also use your favorite payroll software features from another system. More and more vendors are developing tools to be more brand agnostic to support this trend.
How to Use Business Needs to Drive Your Payroll Software Decisions
Before you begin searching through all the payroll software solution options available on the market, it is important to take the time to complete a thorough business review.
To begin, you should gather together a variety of people within your company who are responsible for business decisions and any others who will represent dedicated users on whichever payroll software solution that you choose to implement in your business.
By having a mixture of people within your organization participate in this discussion, you are more likely to gain a deeper insight into what your company needs from your payroll software solution to communicate effectively and drive growth initiatives forward.
Once you’ve gathered the key people for this discussion, it’s important to dive into your business needs and discuss what gaps or holes may exist in your existing payroll processes or systems. Be specific, and keep a detailed list of all the things that you’re looking to improve and how various payroll software solution offerings can help you accomplish these goals.
What Questions Can You Ask to Guide Your Business Payroll Review Process?
- What payroll gaps, issues, or inconsistencies occur consistently, and what is their impact on your company?
- Are your existing payroll tools and systems outdated and cumbersome for employees?
- Are the costs of operating your existing payroll software solution outweighing the benefits you receive?
- What payroll tools and features are must-haves for our company? Which features aren’t as vital?
- How tech savvy are the employees who will use the payroll system most?
- What deployment method makes the most sense for our business and budget?
- How many people will use this payroll software solution?
- Are there any manual processes that could be automated through payroll software solution features to help drive efficiency?
How to Choose Your Payroll Software Deployment Method
Payroll software vendors typically offer different technologies and deployment methods to best meet the size, budget and needs of your company. While cloud solutions are swiftly gaining popularity, particularly among small and medium companies, larger business still often choose to go with an on-site solution, so they can create a more customized and proprietary payroll service.
Here’s a closer look at the main payroll software technology options available on the market.
Cloud and SaaS
Cloud-based technology is becoming increasingly popular for all types of business software, and payroll software is certainly no exception. Cloud technology functions through a third-party platform that is powered by the internet, which supports business mobility and remote system access that a flourishing company needs. Cloud payroll systems are also quite affordable, which gives more companies the opportunity to embrace a payroll software solution earlier in their business.
On-premise, or on-site payroll solutions are systems that are built on-site in an office building or other physical location. On-premise payroll solutions require hardware and ongoing updates and maintenance, which makes implementation more expensive than cloud solutions.
How to Build Your Payroll Software Budget
After you’ve conducted a complete review of your business needs and have a strong understanding of your payroll software solution requirements, it is important to figure out the budget you can allocate toward purchasing or upgrading your payroll software solution. Using the list you prepared while reviewing your business needs, you can determine how much value will be created by using a new payroll software solution, and prepare your budget accordingly.
There are payroll software solution solutions available along a sliding scale of prices that are affordable for most any business, so when you create your budget for this purchase, you should give yourself spending limit as well as a range of pricing models including one-time installation costs or monthly fees. Depending on the size and payroll needs of your company, one type of plan may make more sense financially over the other.
How to Think About the People in Your Company Who Will be Using Your Payroll Software
An important step in selecting the best payroll software solution for your business is to consider the people who will be using the system most. Gathering this knowledge ahead of time will help you select the best option for your business, complete with all the tools, features, and support needed without overextending your budget or selecting a payroll software solution that does not fit your business.
As you think about the payroll software solution users in your company, think over these questions to find the best fit for your teams:
- How many users will be using the system?
- What levels exist in your users? (Basic, Intermediate, Advanced)
- What are the needs of each group of users?
- What type of support will users need as they learn and use the payroll software solution?
How to Determine the Features and Tools Your Payroll Software Must Offer
The features offered by payroll software solution providers are the tools that will help enhance your company communications. While your business needs, users, and budget will all work together to help you choose the best payroll software solution for your business, there are a list of core features offered by most payroll software solution providers that you will want to make sure are included in whichever option you choose.
The core, must-have features of any payroll software solution include:
- Payroll Processing
- Payment Disbursement
- Tax Calculations
- Tax Filing Options
- Compliance System
- Self-Service Portal
- Mobile Access
- System Integration Capabilities
- Calendar Integrations
How to Research and Compare Multiple Payroll Software Vendors
Once you have a firm grasp on all the things you need and want from your payroll software solution, and understand what you have to invest, then you can begin researching and comparing payroll software solution providers.
There are many excellent payroll software solution providers on the market, and you’ll undoubtedly be able to find your perfect system if you take a bit of time to really look into what each provider offers and compare your top choices against one another to determine which is best for you and your business.
As you compare your options, make sure to keep your list of key business needs and required features handy so you can reference them and keep yourself on track as you absorb all of the information and create a short list of viable payroll software solution options.
What to Look for in Your Perfect Payroll Software Vendor
As you meet with various payroll software solution providers that you’re interested in working with, you should do some due diligence in researching their reputation before you commit to purchasing their services.
In addition to features and system functionalities, some of the key things you should look for in your perfect payroll software solution provider are prominence, reviews, and support.
1. Industry prominence and popularity
While you should not choose a payroll software solution provider based on popularity alone, a provider’s standing in the industry can signal what you can expect from their services. Make sure that the provider you select has prominence in the industry and is popular among other companies with similar payroll needs as yours.
2. Reviews from current or past system users
One of the best ways you can easily research a payroll software solution provider you’re considering is to look for reviews given by current or past users. Reviews from current companies using the payroll software solution can give you great insight into how the provider treats customers and how companies value their services and features. Past reviews can establish a history of service values, and give you a snapshot into how the provider handles business over time as well.
3. Support options and availability
Support is a vital component that all payroll software solution providers will offer. However, the types and degree of support will vary from provider to provider, so make sure you know what level of support your team will need, and then ensure your selected payroll software solution provider can easily fulfil those support needs.
How to Set up Meetings or Demos with Payroll Software Providers on Your Short List
Once you’ve created a short list of three to five payroll software solution providers that you’re interested in implementing, it’s important to take your preparation and research one step further and get in touch with each provider. Most providers will happily set up meetings to discuss your payroll software solution needs and requirements, and can demonstrate all the key features for you.
Before you participate in a meeting or demo with a payroll software solution provider, make sure that you refresh your memory on all your business and feature needs. It is also a great idea to provide your lists to the provider prior to meeting, so they can put together the custom options and pricing they have available that will meet your needs. This will make your time much more efficient, and also give the provider a clear understanding of exactly what you require.