Do you feel there is a need to change your payroll software?

When Payroll and Human Resource are critical components of every organization and payroll software is a very useful tool to manage these processes. Managing them manually can be complex, costly and time consuming. However, payroll software solution can give the ability to manage these critical elements so effectively that the results will have direct—and positive—impact on company’s bottom-line. Most payroll software provides the core functionality such as generating payroll, tax reporting, tax filing, etc

Business goes across different stages of the business lifecycle and no one expects business to stay the same indefinitely. Companies envision their businesses growing far beyond their beginnings. With this growth comes an increase in employees and a burden of harder to manage Payroll information. If you are already using payroll software then upgrading to new payroll software can be an important decision for the company at the growing phase. The wrong payroll software at the wrong time of the business lifecycle can prove to be a waste of time/money and can limit your options as your company grows. A few considerations to be kept in mind at the time when company is changing/upgrading the software are :

Change in the Structure – As company grows there is a change in the way company functions or if there is an alteration in the basic structure, business processes, increase in number of employees then entry level payroll software may not be suitable for a larger organization. For instance, if the number of employees being tracked has changed considerably over the last few years or if the existing employees are being made to perform a multiple range of functions and duties, then it would be advisable to change the software if the existing software cannot take care of all the processes or if each employee is required to enter the details manually. At the time when you are buying payroll software it is important to keep in mind the scalability of the software with respect to the growth of the business.

Security – If the software that you are currently using to maintain employee records doesn’t have advanced and stringent security measures which can easily allow break-in or tamper with records then this can be one of the considerations to change the existing system as it will mar the very purpose of the payroll systems. It is a fact that such records influence the employee's rating and further increments and bonuses to a major extent. In such a scenario, it is important to have a system with stringent security measures.

Efficiency - When the team is spending more time to perform simple task. If the older payroll software, takes four to five steps to accomplish simple tasks such as entering invoices and payroll generation etc. then in that the company should switch to a more powerful system that can meet business needs and save time.

Timing – Timing is important when planning to change the payroll software as most of the companies find it easiest to make the transition at certain times during the year. The best to change the payroll software is immediately after a quarter-end or more commonly after year-end. Starting a new year with a new system is particularly convenient because it allows you to simply import historical data from the previous year or two and start a new year with zero balances in the system. You will start fresh with new quarter, but will have to convert calendar year information related to employee taxes, deductions etc.

Generally companies find themselves in their comfort zone when the need to change the software arises. If the reason you do not want to move to a newer system is because you are afraid of change, you should think twice. Sticking to a system which doesn’t serve the end purpose and is not adding any value in the growth of the business will only hurt your business in the long run.


Author on various topics for softwares, saas softwares and cloud computing for SMEs.

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