We recently developed a comprehensive list of requirements for a client looking to replace their payroll bureau serving about 100 staff. While some of the features belong exclusively to mid and large sized organisations, many were relevant to smaller businesses trying to choose accounting and payroll software, or considering outsourcing.
The actual requirements produced were many pages long and touched on features and functionality that were broader than you might think. Based on those requirements, we’ve listed below a number of areas to think about when selecting a payroll system. These include:
• Generally, whether it can meet the basic payroll processing requirements, including things such as calculating and allocating tax, superannuation, leave and handling various pay cycles
• Cost centre or divisional allocation of pay
• Termination payments and calculations
• Back pay and prior pay period error correction
• Payment handling – paying multiple employee bank accounts, bulk payments, superannuation clearing facilities, paying multiple superannuation funds per employee
• How payslips, payment summaries and the ATO end of year electronic processing file are produced, handled and sent
• Leave management, different types of leave, leave loading; how leave is requested and approved; viewing and reporting on leave (employee level, and organisation)
• How time and attendance data is captured and used by the payroll system. How timesheet or other time data is submitted, approved and amended, and how it can be assigned to pay items or categories, and cost centres.
• Rostering, and communicating roster information with staff and managers. Actual vs. roster variance analysis
• Reporting for staff, management and accounting purposes. Flexibility, formats available, whether these can be automated and scheduled
• System access – user and permission management, number of simultaneous users, remote or web access, security.
• Workflow tools and functionality, for example submitting and approving leave or pay change requests, routing to the appropriate manager/s for approval, then to payroll for processing
• Employee portal and self-help tools
• Integration with accounting systems and HR management systems (such as training, performance management, OH&S systems)
• History management – availability of payment history, prior payslips, payment summaries, and prior pay levels and conditions
• Data back-up and security
• Migration and import of historical data from an existing system
• Training and documentation
• Support provided by the systems provider
• Systems and hardware requirements
