Having a reliable and robust payroll system is important for any business. After all, payroll is something a company cannot do without. It fuels the lifeblood of the whole organization, which is its employees. While many businesses start by having a manual payroll system, there are instances when this may no longer be efficient. As the business grows, you’ll need to make changes from manual to automated payroll solutions.
To achieve your purpose of opting to sign up for a payroll solution or provider, you must choose the best. If the payroll solution is only mediocre, then you might be paying for a service that doesn’t live up to its price. Here are some of the most important factors to consider when comparing payroll solutions:
1. Primary Business Goals
Different payroll solutions have their respective strengths and weaknesses. When choosing one for your company, start by evaluating your business goals. Decide whether or not the system aligns with the goals of your business. No matter how excellent a payroll solution may be, if it doesn’t contribute to achieving your business goals, then you’ll simply fail.
For example, if you wish to have a more mobile system for your workforce. Choose the provider that enables a mobile timekeeping system.
2. Data Conversion Availability
This section applies to those businesses that are now switching from a manual payroll system to an automated payroll solution. It could also be for those moving from one payroll system to another one. In these instances, another viable factor to consider is the availability of data conversion.
An online payroll solution has a unified system with HR features and attendance tracking. As a result, there exists a central database for payroll, core HR and time-tracking data.
The availability of data conversion brings with it benefits like:
- increased visibility of company trends and metrics
- enhanced user flexibility
- decreased cost of labor
- reduced errors in payroll
- less chance of duplicate entries
3. Capacity to Meet Future Payroll Demands
When choosing a payroll solution, don’t think only about the present. Look to the future and determine if the system will be relevant for the future needs of your business. In some cases, this can be a very tedious process. Choose the provider you know you will be satisfied with for many years to come.
While deciding on a timeframe, a good rule of thumb to follow is that the payroll provider should still be relevant over a four- to five-year period, with only very minimal changes or upgrades.
4. Data Integration Capabilities
When you’re talking about the payroll of everyone in the organization, do note the basic fact that this isn’t limited to salaries. There are also existing business investment opportunities or the benefits offered to the employees. These all form part of payroll, and your chosen payroll solution should have this data integration capability. For instance, these would include your point-of-sale systems, retirement packages, and general ledger software.
When your chosen payroll solution can integrate these existing systems, you’re able to ensure the data of your payroll is accurate and up to date. Plus, you’ll also get to enjoy additional benefits like:
- point-in-time reporting
- reduced chances of duplicate entries
- reduced need for manual paperwork for your HR team
5. Total Cost of Ownership
Lastly, but also one of the most critical considerations is the total cost of ownership. Your chosen payroll solution provider should be equivalent to the size and financial capability of your business. If there’s a mismatch, you might end up paying much more than what you can afford. Always keep your budget in mind.
Here are examples of the cost factors that you should include:
- system installation cost, usually a one-time fee for the acquisition of the payroll solution
- indirect labor costs, referring to the labor cost of the employees that support and manage the payroll solution
- system upgrades, including the periodic costs of upgrading to the latest version
Conclusion
Choosing a payroll provider or payroll solution doesn’t have to be so difficult. In most instances, it’s only the fear of chaos in your mind that’s stopping you from switching to more efficient options. When you end up with the right one, you’ll begin to realize it’s one of the best changes you can make for your business. In business, you have to ensure that you commit the least errors possible, the payroll of your employees included.
