Selecting a payroll system is a critical decision that requires careful consideration. The right choice will help you build a payroll function that is accurate, on time, protected and compliant. The wrong choice, however, could lead to more hassle than it’s worth, and a never-ending string of technical and support challenges.

Whether you’re implementing payroll software for the first time, or looking to switch – it’s important to weigh up the options to make an informed and confident decision. To help you make the right choice, we’ve compiled eight key questions every business owner should ask when evaluating online payroll software. These questions will assist you in understanding what to look for—and how to find the best payroll solution for your business’ needs.

1. What payroll services do I need?

The first step to knowing what you’re looking for is understanding what you need. Many payroll systems offer a number of services, but if it’s missing a core function that your business can’t do without – then it’s worthless.

Here are some offered services to consider looking for when selecting a payroll provider:

Continuous payroll processing: Automate the payroll processing workflow to calculate how much each employee should earn for each pay period.

Real-time calculations and versatile pay rules: Determine pay for regular and overtime hours and support variables such as shift differentials.

Adjustment management: Manage bonuses, reimbursements, commissions, tips, and other variable pay.

Tax filing services: Automate SARS reconciliation, calculate tax and statutory deductions, and create IRP5s for your employees.

Alerts: Know when an employee is approaching overtime hours or benefits eligibility and receive notifications of any flagged issues in the system.

Automated tax table updates: Ensure the accuracy of employee withholdings by keeping up to date with SARS requirements.

Analysis reports: Get insight and visibility into your organisation with dashboards, reports, and support tools.

Leave requests: Keep track of paid or unpaid time off and allow for employers to approve or deny employee requests for leave.

2. What is the pricing structure?

Money is always the biggest factor when selecting business software, so it’s important to understand what you’re actually paying for. Payroll software generally varies in costs, depending on the features the software provides. When shopping around for payroll software packages, make sure that you won’t be paying more than you have to for features you’ll never use.

Another consideration is how you will be charged. Some software companies charge per payslip that you run, while others work on a per employee basis. Still others offer a monthly fee with different package sizes.

3. On-premise or in the cloud?

The primary difference between cloud and on-premise payroll software is where it resides. Where on-premise software is installed locally on your computers and servers, cloud software is hosted on servers owned by the vendor and accessed via a web browser.  Some of the cloud options are Software as a Service, i.e. you pay as you use, while others may offer a fee structure similar to that of on premise solutions, with the benefit of your not having IT concerns in hosting the solution.

When deciding on which route to go, there are a number of factors that need to be considered, including accessibility, software ownership, software updates and additional services required.

Click here to learn more about on-premise vs. cloud-based payroll solutions

4. Is it flexible enough to scale with my business?

When considering payroll software options, look at scalability. In other words, can it meet your company’s needs as your company grows, and can it do so quickly if your business suddenly needs extra capacity or additional features? If it can’t, you could encounter a crisis when your business needs to add additional users and employees to the system.

5. Does it allow for integration to my existing accounting system?

If you had to implement a payroll system, how easy would it be to transfer your current payroll data to the financial system each month? Most systems allow for seamless integration so that you won’t have to manually reconcile payroll again. It is important, however, to find out how this is done.

6. Will my employees be able to access their payroll information?

In addition to managing employee payroll data, some payroll systems offer an Employee Self-Service (ESS) portal, which gives employees the ability to apply online for leave, view their payslips, submit travel claims and update personal information.

By adding this feature to your payroll package, you’ll not only reduce administrative costs and time-consuming paperwork, but also improve transparency and productivity throughout the organisation.

7. What customer support services are offered?

The payroll solution you choose should be designed to be simple, with an easy-to-use interface. However, you’re bound to have questions or encounter a problem at some point that would require some form of customer service to resolve. If you do need to contact customer support, you want to know that you can get help quickly.

Find out what level of support the payroll software provider offers. Most vendors offer live, real-person support via phone and chat as well as detailed online FAQs and tutorials. However, if your business requires additional support or 24/7 customer service, even on holidays – you might want to check if this can be accommodated.

8. How secure is the service?

Any software service that is hosted online comes with the risk of confidential data being breached or hacked. You’ll want to verify what encryption standards are used by the payroll software vendor to secure your data. Additionally, you’ll need to find out what back up options are available to ensure that your latest information is kept safe in the event of a system shut down.

In the end, the more you know about your own payroll requirements, the better off you’ll be because you’ll be able to better match those needs with a suitable payroll solution.

Learn more about how our PeopleWare Payroll Software Solution can meet your business payroll needs