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5 Checklist items before you start with Payroll software

July 31, 2019
By marketing peoplestrong
5 Checklist items before you start with Payroll software

Once your organization has conducted an in-depth due diligence for identifying the perfect payroll software to move to, the real work will actually begin now. Either prepare to be inundated with heaps of technical issues that almost always present themselves during software implementation, or stay ahead of challenges by using the following pointers before you even begin software implementation.

  1. Gather data from different systems :
    While this may seem time-consuming, this is the most critical step in the process. Gather all data from all existing systems that were previously used to house employee details pertaining to payroll. For e.g. data related to things like Leave and Attendance, Variable Pay, Investment Declaration & Taxation, Performance management, etc. will need to be collated so that it can be linked to the new Payroll management solution. 
  2. Collect previous payroll records :
    If you are a new employer and this is your very first investment in payroll solutions, then you will need to enter all the previous employee data on personal details, compensation and benefits, payment methodology and frequency etc. into the new system. Not only will this ensure continuity of information, it will automate all your previous records, which will really help later in managing taxation and compliance.
    If you were using an existing payroll system and now want to migrate to a new one, you must take some time to understand all the tasks that your employees need to complete and then make a list of the things that can be automated with your new system. Entering previous payroll details will let the payroll software accurately calculate taxes and deductions.
  3. Choose a pay period :
    During payroll software implementation, you will need to set up a pay period, or, in other words, a frequency of pay for each of your employees. Payouts may be done monthly, weekly , daily etc. Once the system understands the frequency of payroll payouts, it can automatically trigger reminders and succeeding processes and make the payroll process much smoother e.g. if someone’s salary needs to be released on the 2nd of each month, a reminder will reach the Leave and Attendance system on the 30th of the previous month for approval. Also, if you change pay periods, the payroll software can calculate your employee’s payroll accordingly and ensure that he/she is properly compensated.
  4. Clear tax and compliance issues :
    Well-crafted payroll software should be able to automatically calculate taxes accurately and make it easy to stay in compliance with all pertinent regulations and legal requirements. It should give you all the statutory reports and also remind you periodically to file these reports with the relevant departments. Negligence on ensuring complete coverage of all compliances and laws onto the software can prove to be costly and may result in litigation or significant fines. 
  5. Define maker-checker system :
    The principle of maker and checker means that for each transaction, there must be at least two individuals necessary for its completion. In this case, a maker creates the payroll and the checker approves it. The mechanism mandates different people to be involved at different stages of payroll processing to ensure that proper control and checks are applied. The maker-checker system eliminates room for error and keeps strict control over system software and data. For example, the payroll calculated by the “Maker” is authorized by the “Checker” before being allowed to be disbursed.

Spend a lot of time testing your new payroll technology, because this is the best way to iron out the kinks. An error caught during the testing phase is far better than having it manifest itself in a real business situation that might lead to business losses as well as very angry management. Once you’ve resolved all the gaps, rolling it out formally will be a cakewalk. Your HR team, already trained on the new system by now, will be able to run payroll far more efficiently, subsequently strengthening your profits in the long run.

Payroll and HR are at the core of every organization. With a new-age workforce distributed across geographies, organizations are grappling with multiple online payroll processes, numerous pay-components, and inconsistent payroll software.


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