Not all payroll systems are created equal. Just as not all businesses are the same, there is no one payroll system that is ideal for everyone’s needs. What works for one organization may not for another and choosing the wrong payroll software could cost you time and money. Therefore, it’s essential to take the time you need to research the right payroll software and choose the optimal one the first time instead of having to go through the entire search and implementation process again.
But how do you choose the right payroll software for your business? We’ve compiled a guide below to make the process easier for you.
Step 1: List Your Company’s Needs
Before you even start looking for a payroll system, you should assess what your business actually needs. Ideally, you should make two lists: necessities and nice-to-haves. The features that are absolute necessities should be the priority when selecting a payroll system. However, with so many payroll software options available, you should be able to find one that goes beyond just meeting the bare minimum requirements. That list of nice-to-haves can help you narrow down your search.
Tip: Consider the Types of Employees You Have
When you’re assessing your organization’s needs, here are some questions to ask yourself:
- What type of employees do you have? Are they salaried, hourly, tipped workers, or contractors?
- How often do you run payroll? Does it vary for different types of employees?
- How many employees do you have?
- Where do your employees live? Are they out-of-state or located internationally?
Step 2: Consider the Future
It’s also important to think about what your company will be like in the future. Some payroll software platforms are designed for specific sizes of businesses and may not be suitable for larger or smaller organizations. You should consider the size of your business right now in addition to its projected size in the future. Your payroll system should be able to meet your needs both now and then.
Tip: Look for a Scalable Payroll System
If you project that your organization will grow significantly, you can look specifically for payroll software that is scalable. These software platforms are designed to grow with businesses and may have different modules for different sizes of businesses. Other payroll systems may be suitable for a variety of business sizes because their pay scale is based on the number of users.
Step 3: Begin the Payroll Software Search
Now that you have an idea of what you’ll need both now and in the future, it’s time to start your search. You can look for payroll software options online or ask other HR professionals which payroll platforms they’ve used. Looking online may result in an overwhelming number of options, however. Additionally, asking another HR professional could help you to narrow down your options, but the software that suits their needs may not be the right one for your own organization.
Tip: Use a Vendor Match Tool
Matchr.com offers a free vendor match tool that helps HR professionals find the right software for their needs. This tool will ask specific questions about what your needs are and then will suggest payroll software solutions that meet those needs. This can be an excellent way to focus your search efforts on the best software matches.
Step 4: Make a Shortlist
Once you’ve found all of the payroll options that will work for you, you’ll need to start narrowing down your choices. Later in the process, you’ll ask for demos and start speaking with representatives from the vendor, but you’ll want to scale down your list first so that you can focus your time on only the most likely of contenders.
Tip: Pay Attention to Your Wants List
That ‘nice to haves’ list you made earlier will come in handy during the process of creating a shortlist. You can narrow down your list by eliminating software that meets all of your needs but doesn’t also meet your wants.
Step 5: Search for Customer Reviews
You can further eliminate software from your list by searching for reviews of each payroll system that you’re still considering. You can ask vendors for customer reviews, but be aware that they’re only likely to share positive ones. You can find a wider selection of reviews online, including at Matchr.
Tip: Ask Your Network
HR professionals may have a network of contacts they can ask for reviews. Knowing someone who has personal experience with a specific payroll software platform can give you the opportunity to ask questions.
Step 6: Ask for a Demonstration
After you’ve decided on your top possibilities, you should contact the vendor for a demonstration. This will allow you to see the software in action and give you the chance to see how it actually works. You’ll also be able to ask the vendor specific questions about how it can work for you.
Tip: Request a Second Demonstration
Don’t be afraid to ask for a second demonstration for any payroll software you’re really serious about. A second demonstration can be an opportunity to get more hands-on with the software. Make sure to ask for the demonstration to include some sample data for your company so you can see how it would work with what you would need it to do.
Step 7: Make the Decision
The final step in the process is to make the decision. At this stage, you should have all of the information you need to choose. You’ve seen the software in action. You know the features and capabilities.
Tip: Take Your Time
While implementing new payroll software may be urgent, it’s extremely important to take the time you need to make the right decision. Choosing quickly could result in using the wrong software, which could slow down your processes. It could also waste your time and money because you would later need to go through all of the selection steps again. Even if it takes a bit longer, it’s important to choose the right software the first time.
