Choosing the Best Payroll Software: What Every Business Needs to Know

If you’re an HR manager or a business owner, we’re sure you’re aware of the complexity of payroll processing. With changing laws and regulations, plus the need to precisely calculate each employee’s pay and deductions, it’s no surprise many of you find this process a major headache.

In fact, many companies are still managing payroll manually using spreadsheets or even paper-based systems. In our recent State of HR 2023 report, we found that only 47.2% of HR professionals are using automated payroll systems.

This is a huge problem as manual methods are prone to error, difficult to update, and can’t keep up as businesses grow. If you want to automate your process and avoid errors, a payroll solution can do just the trick.

But with so many options in the market, how do you choose the best payroll solution for your specific business needs and budget?

The crucial steps are to identify the core features you need and select a solution specifically designed for your organization’s size and industry.

Luckily, there are a ton of user-friendly payroll software options out there nowadays that can take the hassle out of calculations, reporting, and paydays. Finding the right solution to handle those tricky payroll tasks could save your business major time and money — not to mention the peace of mind knowing everything will be accurate and on schedule.

Explore what to look for when choosing the best payroll software provider to increase your company’s efficiency and ensure accuracy.

Payroll software is an essential solution that takes the hassle out of paying employees. It automates the calculation of wages, taxes and benefits, and year-end tax reporting.

Here are some reasons why you might want to consider getting payroll software:

Manual payroll processing can be time-consuming, especially for larger businesses. Imagine having to manually process hundreds or thousands of employee data just for payroll administration.

This can be a real burden for HR, knowing that the average employee can only type 41 words per minute. With payroll software, you can automate calculations of pay, deductions, and taxes, which saves a considerable amount of time.

Human error in payroll can lead to serious issues, including delayed payments, overpayment or underpayment of employees, and incorrect tax filings. In one instance in the State of Guernsey, 5000 individuals received late payment due to “human error.”

Payroll software reduces these risks by automating calculations and maintaining consistent records.

Payroll software facilitates the maintenance of comprehensive records for all payroll activities, crucial for financial reporting, tax submissions, and addressing inquiries about past payroll transactions.

By digitizing employee data and records with payroll software, you can minimize the risks and inefficiencies associated with paper-based record-keeping, such as lost or damaged documents, difficulty in retrieving information, and the need for physical storage.

In the Philippines, navigating the complex and ever-changing tax laws regulated by the Bureau of Internal Revenue (BIR) poses a significant challenge for businesses. Failure to adhere with the country’s current regulations can cause businesses serious penalties, or even worse, tarnish their reputation.

Payroll software becomes a vital tool in solving this as it helps businesses stay current with these changes, ensuring compliance and avoiding potential legal issues.

Payroll data requires vigilant security. With sensitive information like salaries and social security numbers, leaks risk employee privacy under today’s Data Privacy Act.

Payroll software makes protection a priority through encryption, authentication protocols, security audits, and secure cloud backups. By guarding data at multiple levels, companies uphold safety and security while avoiding violations.

Staff can access necessary information without fear of exposures jeopardizing trust.

While there’s an upfront cost to implementing payroll software, it can be more cost-effective in the long run. Companies who adopt payroll software can reduce the need for a large payroll department, minimize errors (which can be costly), and save time associated with repetitive tasks.

Choosing a payroll software provider is an important decision that can have a major impact on your business operations. When choosing potential vendors, here are some key things to consider:

Customer support should be a top priority when choosing a payroll software provider. You want to have a partner that will be there for you immediately when you encounter difficulties.

Examine all support channels offered by the vendor — phone, email, chat, FAQs/forum.

Are support teams knowledgeable about the product and regulations? Is multilingual assistance available for global companies? Can you reach them easily when payroll issues arise?

A reliable and responsive customer support can play a crucial role in maintaining smooth payroll processes and compliance with regulations.

You want to have a partner that is reliable and can provide you results to improve your business. To ensure that you partner with the right one, research the provider’s reputation in the industry.

Look for client testimonials, reviews, and case studies to gauge their reliability, track record, and customer satisfaction levels. Partnering with the wrong provider can be costly and you don’t want the hassle of having to switch from one system to another.

The payroll software should provide an intuitive, easy-to-use dashboard for your team. Look for streamlined menus, simple workflow for running payroll, and flexibility to configure settings, taxes, deductions etc. Less training needed means faster adoption by your staff.

Also, try before you buy — ask vendors for a full-featured free trial before committing.

Evaluate how well the software integrates with your other HR platforms. Having application programming interface (API) support means data can flow seamlessly eliminating manual errors.

• Must haves – integrates with human resource management system (HRMS), timekeeping, accounting software.
• Nice to have – integrates with benefits administration, talent management.

A good payroll solution should offer straightforward, customizable reporting to analyze key aspects like payroll costs, overtime, and absence trends. It should include drill-down features for detailed analysis, allowing users to delve into specific data points.

Additionally, it should provide executive dashboards with graphical views, making it easier for management to understand and interpret payroll data at a glance. Lastly, the ability to create custom reports is essential, enabling businesses to tailor reports to their specific needs and focus on particular areas of interest.

Don’t compromise on security — improperly accessed payroll data can lead to identity theft and compliance failures. Make sure that your chosen provider has strong security measures to protect your company’s data from breaches or unauthorized access.

This includes robust protocols for access controls, data encryption (in transit and at rest), regular audits, backup and recovery. Also, ask about the vendor’s security policies and protections to make sure that they align with government policies.

Selecting the right payroll software is a key decision for any business that has valuable employees to pay and take care of.

With the right system in place, you can make the payroll process effortless, compliant, and efficient. This allows you to focus on growing your business instead of sweating the small admin stuff.

While there are many options on the market, finding and implementing payroll software suited for your exact needs doesn’t have to be painful. Here is a step-by-step guide to help you:

Start by clearly mapping out how payroll is currently handled in your company. Consider key details like:

• Number of employees
• Salaries vs hourly wages
• Locations of staff (single office or multiple sites?)
• Pay types (direct deposit, paper checks, etc.)
• Payroll frequency (monthly, bi-weekly, weekly?)
• Other unique considerations

Documenting your workflow will give you clarity on features you need from the payroll software for an easy transition. If your processes are complex, don’t hesitate to diagram how payroll moves through your business.

Next, set realistic budget expectations for the payroll software. Packages range dramatically in cost depending on included features and capabilities.

Cloud-based solutions allow smaller businesses to access payroll data without huge upfront costs. If implementing more advanced software like (Enterprise Resource Planning) ERP, prepare for significant integration expenses.

Now, research the most reputable payroll software vendor for your business size which fits in your budget. Compare capabilities like payroll tax calculation, direct deposit, reporting, etc. against your needs.

Consider the list we made above regarding what to look for in a payroll software provider to give you a better understanding of what to expect.

Speaking to other businesses similar to yours can provide candid insight into how payroll software performs. Seek referrals from your chamber of commerce or industry associations.

You can contextualize online reviews better knowing a recommendation came from a business with comparable needs and challenges.

Ensure any software you consider meets all BIR and local payroll compliance regulations. Mobile apps and digital platforms still require rigorous data security — vet encryption methods and authentication protocols.

Maintaining payroll confidentiality while staying compliant is critical for the safety and security of all employees.

Once you’ve narrowed down 2-3 vendors that fit your needs and budget, request for a free trial and thoroughly demo the payroll software. Running your own payroll scenarios on the actual platforms will clearly highlight the best choice aligned for your workflows.

In addition, reach out to vendor representatives for personalized demos and price quotes before officially subscribing.

Finally, after selecting the right payroll software, be sure to keep reviewing its performance over time. As your business grows and changes, you may need to make adjustments or switch vendors.

Stay proactive in addressing any issues before they spiral into major problems.

Following this structured selection process will lead you to affordable, compliant, and easy-to-use payroll software tailored to your growing business.

Selecting the right payroll software is a strategic investment that can pay dividends through increased efficiency, cost savings, and peace of mind. While evaluating your needs and shortlisting vendors takes effort upfront, you’ll reap rewards over the long term.

With an automated system in place tailored for your workflows, you can focus energy on business growth rather than administrative tasks.

Among the numerous payroll software providers in the Philippines, Sprout stands as the leading provider, reducing payroll processing time by up to 90% with its innovative solution — Sprout Payroll.

Sprout Payroll is a cloud-based solution that fully automates payroll and government contributions computation and report generation, reducing the room for human error.

Additionally, it extensively covers 32 types of OT pay rates and allows customization of payroll for diverse work schedules.

Sprout Payroll has transformed manual payroll computation into a process that requires just a few clicks, thereby saving time and allowing HR to focus on other tasks.

Are you ready to transform your payroll process and improve efficiency?

Book a demo today and experience the benefits of partnering with a vendor that cares for your needs.