Let us begin with a reality check. As a payroll practitioner, which part of a payroll process are you not too confident about or the role, you’re nervous about most? Is it pre-payroll, during payroll, or post-payroll? Or is it accounting or statutory compliances? If the solution to anybody of those may be a yes, then the likelihood is that you’re running a manual process or are using unreliable payroll software.
So, what are the alternatives, or how do i assess if a payroll solution is that the right one for the organisation? There are many payroll software within the market today but one isn’t sure if they’re reliable or scalable.
What features constitute a strong payroll software
Assess your requirement first
This is the essential exercise you want to perform. Get to understand the HR policies and Pay structure. Understand how the pay structure is split between cash components and non-cash benefits like insurance, car, gratuity schemes, etc. Gain clarity on eligibility, documentation, validation, taxability, etc.
Also, evaluate other auxiliary requirements like Time & Attendance portal, Leave management, Overtime, Proof of investment, Reimbursements, or ESS/MSS portals which generally form a neighborhood of payroll activities.
Taxability of pay components
As payroll is liable for statutory adherence associated with pay, you ought to assess each pay component for taxability and reporting. Most components are usually covered under either labor laws or tax laws. These must be identified clearly to make sure relevant deductions or payments do happen.
Before Purchase Payroll Software, it’s prudent to remember future plans of the organisation so as to make sure the proper quiet application is chosen. The software should be scalable enough to keep up with an expanding or ever-growing workforce. Resources might be situated in various or maybe remote locations. Each location has its local law to be complied with, and hence it’s important to make sure the payroll team is kept conscious of such plans.
With these basic considerations, now it’s time to guage payroll software individually through a demo or maybe posing for an attempt to perform an independent run with some dummy data. an honest payroll system will have an in-built validation process at each level, right from the time you enter the salary input file to the time the ultimate pay register is generated. Validations are often done at a summary level or maybe at a line-item level or by components, whichever one is comfortable with.
More importantly, how flexible is that the system in terms of accessibility, upgrades, or maintenance? Is it an out-of-date stand-alone system in which the majority of inputs and outputs must be done manually? the longer term lies with cloud-based web applications at any time, anywhere facility. Cloud apps are practically low-cost as there are minimum hardware and maintenance involved, very safe in terms of knowledge security, well supported, etc which is why most organisations have moved to the present technology now. And what’s more, it’s available on a monthly or annual subscription model!
The bottom line is that the payroll solution you’ll select should perform all complex scenarios with speed and efficiency. If you’ve got identified a pain point in your monthly payroll cycle, you want to ensure this solution has addressed it up to your satisfaction.
Proof of the pudding
Proof of the pudding lies in tasting it – so goes the old saying. Similarly, the payroll system should be ready to generate reports just like the pay register, validation summary or charts, statutory notices and returns, accounting entries, payslips, reimbursement slips, employee-related forms, MIS, audit schedules, etc. While some reports and returns are standard, some others should be customizable to the requirements of the payroll or management of the organization.
Check safety features
Apart from running an efficient payroll, you want to make sure the system is secure with requisite access controls, backup plans to make sure no loss of knowledge, has Procedures for catastrophe recovery and record retrieval, as well as a management system
From a risk management perspective, many software has in-built checklists, reminders, and warning pop-up messages to verify that every procedure has been followed while running a monthly payroll. These checklists are often customized to incorporate any sub-process as per the team’s requirements. Intra-communication module also can be built to speak with internal stakeholders or employees on any issue or need.
Authorization matrix, segregation of duties, and workflow charts are often configured for auto-routing of transactions before any payment or receipts are recorded within the system. this may make the system audit compliant too.
In summary, we’ve now:
- Evaluated clearly the organisation’s expectation from the payroll
- Gained clear requirements in terms of expansions and wage types
- Have a clear understanding of pay components and how they comply with tax and labour laws.
- Payroll systems that have been evaluated and are tailored to the needs of the company
- Checked on validations, risks, and controls that are available within the system
- All required statutory and non-statutory reports, as well as MIS, were generated.
- Ensured all kinds of portals are available, and
- Conducted a test with dummy data
With this, you’ll now be ready to finalize and install a payroll software that will now allow you to sleep in peace, whether it’s during pre-payroll or during payroll or post payroll.
Cloud software helps to avoid risks, errors, or fraud, and most significantly, supports data integrity, security, and maintenance. Popular and well-established HR softwares like PionHR supports many organisations by implementing state-of-the-art HR & Payroll softwares with their latest web-based cloud software for an anytime, anywhere employee experience. Call us today for a demo.
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