Whether you’re a new small business looking to hire the first few employees, or you’re an established small business looking to improve current processes, it’s essential to choose the right payroll software for your business. The right software can help you efficiently manage tasks such as STP reporting, time capture, and award interpretation, but also help you save time with the automation of recurring tasks.
In this article, we will help you learn several key considerations and what the most vital features are when buying payroll software.
Consider the complexity of your payroll operations. Even a small business with a few workers may have different ways of paying employees, such as some salaried employees which may be simple, and some who are on complex awards or agreements that need to be interpreted for penalties, allowances, and overtime each pay period.
If you do have employees who are covered by an award, look for payroll software that includes built-in award interpretation capabilities to accurately calculate wages and ensure compliance. This feature will save you time and reduce the risk of errors in your payroll calculations.
Cost and Budget
Evaluate the cost of a new payroll software and ensure that it fits within your budget. Consider whether the software is offered as a one-time purchase, a subscription-based model, or a combination of upfront and ongoing fees. Remember to consider any additional costs for upgrades, customer support, or training.
You also need to consider the time spent on payroll tasks when looking at the cost of payroll software. While there may be very cost-effective solutions available that help you meet obligations, consider if the software will reduce the time spent on payroll or not. You may be better off going with a software that is a bit more costly, but includes automation and more included features, so that you save on time.
Features and Functionality
Assess the features and functionality offered by the payroll software. Consider the functions your employees need to have access to, such as rostering, timesheets or time capture, leave requests and access to payslips.
If your business requires employee scheduling and rostering, consider payroll software that incorporates rostering capabilities. This feature can help you create and manage employee schedules, track attendance, manage shift swaps, and ensure adequate coverage within one platform.
If you pay employees on an award, look for payroll software that offers user-friendly time capture features. It should allow employees to log their working hours, breaks, and overtime.
Employees having access to an employee portal or self-service empowers your employees to access and manage their personal payroll information, such as updating personal details, accessing payslips and payment summaries, and submitting leave requests. Employee self-service reduces administrative workload, increases transparency, and enhances employee satisfaction.
Also review the specific payroll tasks you need to manage as an administrator, such as calculating wages, tax, deductions, and superannuation contributions. Look for software that can automate as much of this as possible, while maintaining compliance with Australian payroll legislation.
User-Friendliness and Ease of Use
Payroll software should be user-friendly, especially for those without extensive payroll experience. The software should have an intuitive interface, easy navigation, and an online help centre where you can go if you need help outside of business hours. Consider whether the software offers training resources, tutorials, or customer support to assist you in using the software effectively.
Ensure that the payroll software complies with relevant legislation, as well as reporting and tax requirements. Your payroll software should support Single Touch Payroll (STP) with Phase 2 compliance reporting to the Australian Taxation Office (ATO).
Many payroll software’s have integrated superannuation processing which allows you to use their clearing house to pay contributions into your employees’ accounts. Having the super function within the payroll software reduces the time spent on this task and ensures informative messaging when super payments are rejected or returned, allowing you to easily reprocess them.
Choosing a software with awards pre-built and automatically updated help you confirm are paying your employees correctly. The awards will interpret timesheets submitted to calculate overtime, penalty rates and allowances in accordance with award rules, and the software will update rates for you within these rules, so when something changes you have the latest information at the click of a button.
Integration with Other Systems
Consider whether the payroll software can seamlessly integrate with your existing systems, such as accounting software and human resources systems.
Integration can help streamline data flow, reduce manual data entry, and enhance overall efficiency. This also saves time on administration, as you won’t need to be entering the same data across multiple platforms, which in turn reduces the likelihood of mistakes being made.
Scalability and Growth Potential
Choose payroll software that can accommodate your business’s future growth. While your business may start off with a couple of employees, you may be looking to scale the business in the future.
Consider whether the software can handle an increasing number of employees, additional payroll complexities, and evolving regulatory requirements. Scalable software ensures that you won’t outgrow the system too quickly, saving you from the hassle of migrating to a new solution.
Data Security and Privacy
Payroll involves handling sensitive employee data, so data security should be a top priority. Check whether the payroll software offers robust security measures, such as data encryption, secure servers, and regular backups. Ensure that the software vendor adheres to privacy regulations and industry best practices to protect your data.
You may also need to consider user access into the software when considering security. As an example, if you have a manager within the business who needs access to some payroll data such as leave and timesheets, can their access be limited so that they aren’t able to see employee data such as salary?
The Key Takeaway: The right software makes effortless payroll
By considering these factors, a small business can make an informed decision when choosing a new payroll software that best fits their specific needs, enhances efficiency, and ensures accurate and compliant payroll management.
If all of this feels like it might be too much to manage in-house, you may like to consider outsourcing your payroll instead and let the Payroll experts take care of it for you. If you’d like to learn more about how outsourcing works, find out more information at Employment Innovations.
About Employment Innovations
Employment Innovations is one of Australia’s leading providers of employment services designed to increase productivity and ensure compliance. Its services and solutions include all the tools that every Australian small to medium sized employer needs – including workplace advice, legal services, payroll solutions, migration, human resource management and HR software.
The information provided in these blog articles is general in nature and is not intended to substitute for professional advice. If you are unsure about how this information applies to your specific situation we recommend you contact Employment Innovations for advice.