The tangled world of payroll software might seem intimidating when you first start investigating it. We understand; you’ve probably got a lot of questions. What is it? How does it work? How much is it going to set us back? Will it actually deliver everything it promises?
Don’t fear… Help is at hand. This is a guide to everything you could want to know about payroll software and will shed a little light on how simple your payroll could be!
What is payroll software?
Payroll software is the solution used by organisations who choose to run their own payroll in-house. Payroll is complex but payroll software doesn’t have to be. It’s packed with tools that will automate and manage all the payments you need to make to your employees. Think of it as the cure for all your payroll headaches. The right software package will:
- Calculate wages and salaries
- Take care of deductions payable to HMRC
- Handle bonuses, benefits, and expenses
- Deal with holiday pay, sick pay, maternity pay, final pay, and much, much more!
So that all sounds pretty good, right? The next thing to consider is the kind of payroll software you want to go for – on-premise or cloud based? We know that might seem a little technical, but even this is simpler than it sounds.
1. On-premise payroll software
In the early days of payroll software, this was the only option. Your payroll solution would physically live on a server or a PC somewhere in your workplace and you would log on at that location to see or input data. But then along came… the cloud!
2. Cloud-based payroll software
Ironically, hosting your payroll solution in the cloud is a ray of sunshine for the payroll team. Cloud-based payroll software works just like we do. It works from anywhere, any time. That’s because with a cloud-based package, your data is held on secure servers which are hosted online. Unlike the on-premise solutions, software updates and new releases are pushed straight into the platform with the user having to lift a finger.
3. Integrated payroll and HR software
There is one other term we want to explain before you read on and that is: integration. Integrated software may just be your new best friend… Because the beautiful thing about your payroll software is that it can be fully integrated with your HR system. Which means one point of data entry and then joined-up thinking in every aspect of your HR and payroll process. Sounds even better.
So, what can payroll software do for you?
If you’ve read this far then you’ve earned the novice badge already. Let’s take you up to expert level and dig a little deeper. What does payroll software do (on a more micro-level!) and how does it work? Don’t worry, you don’t need a computer science degree for this. We’ll give you just what you need to know:
1. Store employee data
Starting with the basics, your payroll software is the vessel for all your employee data. And if it integrates with your HR package as we said above, it’s a one-stop-shop (and single point of entry) for everything you will ever need to know about your employees, covering personal information like name and address right up to their banking and remuneration data.
2. Automatically calculate pay and deductions
Hooray! This is one of the biggest benefits of payroll software. All that time spent calculating, deducting and double-checking. Not only will your payroll software work out pay, it will automatically manage deductions too. Think employee tax (PAYE), National Insurance (NI) contributions, student loan deductions, benefits, Employment Allowance.
All those fiddly calculations should be covered by a good payroll software solution. And if you’re savvy, you’ll choose a product that handles payments to the HMRC too.
3. Manage multiple roles and pensions
There are economies of scale, because once you start calculating, deducting and double-checking for all the different roles and pensions, things get pretty time consuming. Especially if one person holds multiple roles or contracts. With good payroll software, you can simplify all those complexities.
It’s easy to manage pay and deductions for every individual no matter how many separate individual contracts you are dealing with – if that sounds like something you need, make sure you pick a software that can handle multiple roles!
4. Make employee payments
On time, every time. Whether it’s weekly or monthly, when payday finally comes, everyone loves the payroll team.
The way payroll software processes employee payments might differ slightly from provider to provider. It might be that your payroll software produces a payment file that your organisations bank uses, meaning you can just upload it to your payment site without needing to key in the amounts. Or maybe your software provider is associated with a BACS bureau and can submit payments on your behalf.
Whatever the process, make sure that your payroll software has you covered and makes employee payments easier.
5. Scheduling automatic payslips
Remember when payslips used to be a piece of paper in a pigeon-hole? Well, your payroll software can produce PDF versions for you to print if you’re still old-school. The next step up would be emailing these to your employees. But the best option is to go employee self-service, where they’ll have access to their payroll documents whenever, wherever they need it.
6. Employee self-service
And while we are on self-service and the ability for every employee to keep their records with the technology in their pockets… let’s just think holiday and absence requests… or never having to replace another lost payslip.
7. HMRC compliant reporting
Keeping employees happy is one thing. But the HMRC needs a bit of attention too. All those reports like Full Payment Submission (FPS), the Employer Payment Summary (EPS), expenses and benefits (P11Ds)… Not to mention payroll year end.
We know that there are some readers who will be getting the happy shivers as soon as they read those wonderful words. But for those of you who would like a little help, your payroll software should be able to handle all of this, in a fully compliant way. Shiny reports will be provided for you, all ready for you to submit to HMRC. That’s a load off!
8. Auto-enrolment
Good payroll software will help you stay compliant with auto-enrolment by streamlining the entire process in-platform. That means the software will start with assessment to identify who is eligible all the way through to employee communications to the lucky candidates. Sounds good, right?
9. Date-driven
Any good payroll software is date-driven. Just like a good payroll team. What that means is that any back-dated pay is calculated automatically – a simple but powerful piece of functionality that you’ll be grateful for.
What are the benefits of using good payroll software?
Hopefully you’re convinced that great payroll software is going to change your working life! So let’s explore just how life-changing it could actually be. The right payroll software will offer you an all-in-one platform that delivers on everything you need. Sounds too-good-to-be-true? Let us explain exactly what your payroll software can do for you:
Accurate employee pay
Hopefully we’ve already convinced you on this one. It’s going to do all the number-crunching. It can handle all the statutory rates you need to calculate. All those statutory deductions will be managed for you. Meaning you stay headache free, and employees stay happy. Choosing a self-service option also means that any holiday or sickness absence can be accurately managed by employees, and it will be reflected in your payroll system automatically.
Total HMRC Compliance
In payroll, compliance rules. So, it’s key that whichever payroll software you do choose offers you full compliance. With ‘patches’ that roll out automatically when legislation changes you will always be up to date with the latest regulations. Of course, we can’t remove the responsibility completely, but the software will help you know you are getting it right.
You can double check that you’re making the right choice before you invest – HMRC have a payroll software directory of all platforms that are compliant.
A happy team
With the right payroll software solution, a potentially complex monthly routine becomes a simple one. Any employee pay, no matter how complicated, will be calculated accurately, leaving everyone confident that things are being handled in the most timely, compliant, and efficient way. Which is great for the finance team.
And if you choose to go down the self-service route, the impact on the organisation will be pretty far-reaching. Employee self-service = all the right data + anywhere, anytime access for all employees + automated workflows. Which all adds up to equal a happy workforce.
And once you integrate with your HR software, the possibilities are almost endless. Integrated payroll and HR software, plus employee self-service gives you a unified and branded solution that will be smooth and seamless.
Time saved
With all this automation, your experts are freed up to deal with the more interesting parts of their job. No more time spent calculating and recalculating spreadsheets, shuffling pieces of paper from one employee to another, or endless chasing for up-to-date employee details.
And if you’ve gone for the fully integrated payroll and HR option… HR will enter new employee’s personal data into your HR system which then pulls straight through to payroll. So, you never have to spend time onboarding and offboarding employees to your payroll.
Running complex payroll
If you have ever had to manage payroll, you know how stressful this job can be. Not only are there endless calculations for different variants, there are all the issues around compliance—and the fines that come with non-compliance.
Your payroll software has got your back. That clever little package knows statutory rates, reporting requirements and is GDPR compliant. You never need to feel the payroll panic again.
Powerful insights
The pressure is on HR and payroll teams to provide execs with insights into all kinds of data. They might want you to spot absence trends, provide reports on pay variance, pension and benefit claims, or mileage claims. Or any other concern that is on their agenda.
The good news is that with your new payroll software that’s only a click away. The built-in reports offer you incredible analytics. And if the report you are looking for isn’t there, you should be able to create custom reports that meet your needs.
What are the risks of using bad payroll software?
The benefits are clear. There are so many ways that payroll software is going to make life easier, as long as you have the right software in place. But if you choose an unreliable solution there are a number of things that could go wrong…
Getting it wrong
Not many people work ‘just for the fun of it’. And most people are counting down until payday. So as the person responsible for payroll, the last thing you need is a headache the day after when complaints start rolling in if people get the wrong pay. The whole idea of payroll software is to make life easier, not harder!
Failure to comply
Remember we told you that your software will stay up to date with all the legislation? That is a huge benefit, as long as you can trust your software to keep you fully compliant. And good payroll software will. Again, if you’re unsure, check out that HMRC list of compliant packages. Non-compliance is non-helpful.
Security issues
You store a lot of data, about a lot of people. Data that needs to be protected. But hackers are getting more sophisticated. In 2022, 39% of businesses in the UK suffered a cyberattack. That comes at a cost to your organisation, but also to your peace of mind.
So, when you start looking for your payroll solution, check out password protocols, the quality of the infrastructure and any accreditations. If you want the best look for ISO 27001, HMRC approval, or the Payroll Assurance Scheme.
Integration dis-integration!
Integration is your friend. Is there any point in getting an incredible, whizzy HR system, and all-singing, all-dancing payroll software that don’t talk to each other?
Especially when manual data entry across multiple systems is prone to errors. Which means more admin work. And less time spent on the things that matter.
With single point of data entry, automated workflows, and employee self-service, you can free yourself up to spend your time on bigger and better things!
Useless analytics
The abacus, the slide-rule and the scientific calculators were all cutting edge once (and yes, you can throw your scientific calculator away once your payroll software is installed!). These days, measuring data is a little more refined.
You need powerful reporting tools to provide your organisation with the edge they need to stay ahead of the curve. Make sure whichever payroll solution you choose has analytics that will give you what you need at the touch of a button.
I’m in! How do I get moving with my payroll software package?
Well, that’s the easiest question yet. At Cintra we love to talk about payroll (bet you don’t hear that often!). We spend a lot of time and energy making sure we are one step ahead. We are proud of the new features and updates in our market-leading software.
So why don’t you get in touch, and we can discuss all the ways Cintra Pay can keep you ahead of the game?
- Simple, automated processes
- Powerful Insights
- Absolutely compliant and secure
- Top class multi-user support
If you like the sound of all that, just book a demo to take a closer look.
Payroll Software Buyers Guide
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