Payroll software is meant to simplify your life. If your payroll process is not achieving that, it might be time to review what your payroll needs are, what you have in comparison, and what you could perhaps improve. Often changing software can achieve a simplification of your process.
Before we get started on what to look for if you’re thinking about switching, let’s look at when the best time is for switching.
When to switch
In theory, you can switch payroll software at any point you want. However, there are definitely better timings. The best time to switch is at the end of a financial year. This means you can simply import historical data from the previous year or two and start the new year with zero balances.
When you switch software, it is vital to start with the correct information in the payroll system. You would have to do a complete audit before switching. Consider when you would have the capacity to do so. Again, this might be better achievable after year-end.
If you need a switch more urgently and year-end is a few months off, the next best times for switching would be at the financial half-year point or at the end of a quarter. Consider the capacity of payroll staff to audit and transfer information and then smooth out the details once you have the new system in place. Switching at the end of a quarter means you’ll start the new quarter with zero balances, but you would still need to convert calendar-year information pertaining to earnings and deductions. There is a risk of converting this information incorrectly.
It is possible to change any time you want, of course. If that suits your company better, check with your software provider whether there are specific considerations that you need to keep in mind.
Once you’ve decided when you will switch, we have compiled a list of top considerations to help inform your decision.
TOP 10 CONSIDERATIONS WHEN SWITCHING
Before embarking on your quest, consider what features would be important to your payroll. If you are a small business, the features you need are quite different to what a large conglomerate would need. Is your payroll department a one-person-show, or a team of people? Are you outsourced or inhouse? These considerations will influence the way you’ll run your payroll and what you’ll need your payroll software to do to accommodate your specific needs.
2. Know your budget
Consider how much money you have to spend on software.
3. Data transfer and conversion
How would data from the existing system enter the new system? Will it be done manually or can it be imported? Many providers offer a customizable link to transfer data from one system to the other. This could mean setting up translation tables in the link template to link fields in the old system with fields in the new system.
Once the data is transferred, run reports on both systems and compare the results to verify the correct transfer of information.
4. Side-by-side processing
Once the new system is implemented, payroll can check the accuracy of the system by running both the old and new payroll systems parallel for a specific period.
Consider who in the company will be performing the switch. Does the payroll software provider offer implementation and consulting services? Or would you need to set up the system on your own? And do you have the capacity or manpower to perform the implementation. Don’t underestimate the time it takes to transition accurately. Perhaps you may need to hire extra hands for the transition or require staff to work additional hours. Incorporate all this in your budget.
6. Integration capabilities
How would your payroll software integrate with your accounting and HR systems? Consider whether you want HR and general ledger functions built-in or optional.
There are, however, many benefits to having integrated HR, payroll and accounting systems. One is that you can avoid duplicate data entries because you make changes to the database only once. When payroll, HR and accounting data are stored in the same place in the database, you can reduce paperwork. And having consolidated reporting is a clear bonus, which is far easier accomplished with an integrated system.
7. Customer support
What kind of support do you get with the software you choose? Ask about support staff’s certifications or awards. Check whether support is always available or only sometimes. Such as unlimited phone support, or 24/7 online support. How many technical support reps are available? And what is the average response time on a technical support call?
8. Local support
This could be an important consideration for your company. This includes sales support, installation, implementation and ongoing technical support. Are these available locally or not?
9. Software provider stability and track record
Payroll is a company’s largest expense. It is also the most visible, meaning there is no room for mistakes when it comes to employees’ paychecks. Therefore consider a payroll software provider’s reputation and reliability.
Yup, check reference of other companies using the system. It is useful to talk to companies of similar size in the same or similar industries about their experiences with the payroll software and the accompanying support.
Test different vendors with your criteria to find the best fit for your company. Start with OPS today and see what we can do for you.