<img height="1" width="1" style="display:none;" alt="" src="https://px.ads.linkedin.com/collect/?pid=231787&amp;fmt=gif">

    What are the Critical Choices in Buying Payroll Processing Software?

    December 22, 2020

    Stay Updated

    Written By

    There will be times when you face a dilemma between opting for an end-to-end Human Resource Management System (HRMS) or a best-of-breed solution. It could be when your HRs are swamped with manual payroll processing and are looking for some relief or when your organisation has grown to a stage where you need to automate your payroll functions. The need could also arise when your existing technology just isn’t cutting it anymore.

    While each of these choices have their pros and cons, statistics show that most organisations are veering towards adopting a unified solution. As written in the article named Ten Disruptions in HR Technology, Bersin by Deloitte in 2015, 33% of companies have 10 or more HR systems for their employees to use. But many want to ditch the best-of-breed solution model to make tasks easier on users. 

    Payroll processing softwares comes in various packages. While some are integrated HR and payroll software, ERP, or accounting systems, others are independent payroll solutions. Before committing to a plan, consider the following key factors to ensure you’re getting the best value off your budget.

    Let’s take a look at both types:

    Integrated vs independent payroll systems

    Features Integrated Payroll System Integrated Payroll Solutions
    User Experience Central Control Center with a consistent UX Disparate admin panels
    Reporting and Analytics Single reporting with a common database Multiple reporting tools and requires data aggregation from various sources
    Data Integration
    • Single platform
    • Limited integrations required
    • Improved data accuracy
    • Multiple platforms
    • Complex integrations
    • Data loss and prone to errors
    • Single sign-on
    • Single architecture
    • Single security management
    • Reduced IT training and maintenance costs
    • Multiple logins
    • Complex architecture
    • Requires intensive IT training 
    • Added maintenance costs
    • Less secure and vulnerable to attacks
    • Single team handling
    • One point of contact
    • Longer implementation
    • Integrated project timelines
    • Lower cost of implementation overall
    • Multiple vendors to handle
    • Multiple points of contact
    • Disintegrated timelines to monitor
    • Faster implementation
    • Higher cost of implementation overall
    • Single vendor
    • Well managed training process
    • Multiple vendors
    • Unconnected training processes


    The above distinction will help you narrow your choices and find  the perfect solution to your business and budget. 

    But there is another crucial aspect that you need to keep in mind before you make your choice to purchase payroll processing software. Let’s look at that one: 

    1. In-house vs outsourced:
      Conducting an in-house payroll offers more flexibility in making changes while outsourcing payroll helps you in handing over the work to a third party thereby reducing your efforts. Are you still sitting on the fence about outsourcing or doing the payroll in-house? There are several factors you need to consider before deciding.
    2. Size of the organisation: 
      Smaller businesses often tend to outsource their payroll function because it is easier and cheaper to give it to an expert than hire and train one. However, for multinational companies, the situation is a little different due to the number of employees and the complexity involved in processing payments. It is therefore advisable to go for in-house payroll software.
    3. Tax laws and statutory compliances: 
      Tracking constantly changing laws and regulations around taxation and other compliances can become tedious. Additionally, non-adherence to the statutory and compliance laws leads to hefty fines, thus making it crucial for an organization to follow statutory compliance in sync with the country's laws. Similarly, payroll providers have to monitor changes in legislation at all levels to ensure all payroll processes comply with the recent changes. Outsourcing could help shift these burdens to an expert.
    4. Last-minute paychecks:
      Last minute paychecks are inevitable. With in-house payroll, the license fee payments are done based on the number of employees, hence last-minute paychecks and off-cycle payments can be done at no extra cost. However, if you outsource your payroll, the last-minute pay may be difficult to process, also adding to additional cost.
    5. Complexity of the payroll: 
      In large enterprises, with a high number of employees, varied pay scales and benefits, multiple locations and having both full time and contractual workforce creates complex payroll structures. In such situations, having an in-house payroll system is recommended as it would require doing most calculations yourself before handing it over to the third party. Moreover, in-house systems allow  you to generate reports and have detailed analytics. Here is a ultimate guidebook to simplify your payroll buying process
    View all posts

    Stay Updated

    Speak Your Mind


    Subscribe and stay up to date