Choosing the right payroll software is a critically important business decision for payroll bureaus and accountancy firms that offer their own payroll services.
Clients expect their outsourced payroll services providers to be accurate, efficient and legally compliant – which can be challenging given the complex and constantly moving nature of the payroll landscape.
Read this article for advice on selecting the right software for your accountancy practice or payroll bureau.
Using the right tech for processing payroll
“Processing payroll and managing it well is a time-consuming activity that requires skill and knowledge,” says Nick Paterno, managing partner of Sidcup-based McBrides Chartered Accountants.
“The Real Time Information required by HMRC is tricky and something that needs to be handled efficiently and accurately. Getting the details correct is essential.”
Technology is key to enabling accountancy firms and payroll bureaus to live up to the expectations of both their customers and HMRC.
“It is essential to have reliable software,” explains payroll consultant Kate Upcraft. “So, you need to do your research before you jump in and buy it.”
If you are looking to choose payroll software for your accountancy firm or bureau, how should you go about doing this research?
Start by talking to industry contacts and peers about which software they are using and why, and follow discussions on industry forums.
There are also a number of online comparison sites that allow you to evaluate different software and read reviews.
If you’re looking to switch from your current payroll software because you’re dissatisfied with it, ask your potential new provider to talk you through the switching process, with a particular focus on the migration of data.
It’s a good idea to try before you buy.
“Always ask for a demo from the software provider,” suggests Amy Walker, payroll manager at Huddersfield-based accountancy practice Sheards. “Then try out the software and get the team involved with trialling.
“Take advantage of any online tutorials or YouTube videos that can help train the team in how to use it.”
Looking to the future
Accountants need to consider a number of different factors when choosing software.
These include the cost of the software, how many client payrolls they plan to manage using it, and integration with accounting systems. Data within the system should be stored securely.
For business continuity reasons, cloud-based software is more advantageous than desktop software since it enables payrolls to be run anytime and anywhere.
“It is important to use robust software to eliminate room for errors, ensure compliance with the General Data Protection Regulation, and automatically generate payslips and reports,” says Kayleigh Rawson, a payroll administrator at East Midlands-based accounting firm WKM Accountancy Services.
“Make sure you choose a provider that has a user-friendly interface, since this will make your life much easier when it comes to training your staff on the new software.”
Alison Habebi, accounting services manager at nationwide firm Haines Watts, says: “Choose software that will future-proof your business as it grows and its needs change.
“For example, check the upper limits on the number of payrolls you can have in your bureau, and the number of employees within a payroll.”
Client needs to think about
You will need payroll software that caters for your clients’ needs in terms of payroll frequencies (monthly or weekly) and type of payroll (annual salary or by the hour).
In addition, you may need software that enables you to run reports on behalf of your clients so you can provide them with powerful insights.
Support is another important consideration – seek out a payroll software provider that provides you with a comprehensive support service.
Key functionality to look out for includes:
- Submission of Real Time Information returns to HMRC – this is essential.
- Real-time calculation of employee pay rates, as well as maternity pay and Statutory Sick Pay.
- Real-time tax, National Insurance and student loan calculations.
- Automated payments.
- Pension administration.
- Printing or emailing of payslips.
- Automatic processing of court orders.
- Importing of data from Excel.
- Compliance with industry-specific legislation such as the Construction Industry Scheme.
Rolling out your new solution
Once you have chosen the payroll software that seems the best fit for your accountancy firm or payroll bureau, the next step is to roll it out.
As well as training in the software itself, staff will also need to gain the essential legislative knowledge that is needed to run payrolls on behalf of clients – if they do not already have it.
“You need good training and support to help the team use the software and keep up to date with the legislation,” says Habebi.
“Also, remember that payrolls are not always just monthly. Many retail and hospitality business will pay weekly. You need to plan your staff resource accordingly.”
Upcraft confirms that no matter how good your software package is, it’s inadvisable to rely on technology alone. Human expertise is critical to the efficient functioning of payroll systems.
“You should have enough knowledge to check that their output is right,” she says. “So, you need to be able to do manual tax and National Insurance calculations to check the software is producing the right results.”
Paterno adds: “Culturally, its good to get everyone on board at the outset. The various departments in your business also need to know that you provide this offering.
“Someone in corporate finance, for example, may have a client who needs payroll, but hasn’t had a conversation about it to date.
“Provide excellent marketing materials and information that’s clear and easily understood so that other departments will understand the benefits to their clients.”
Conclusion on choosing the right software
Investment in good software can be a major competitive advantage for payroll bureaus and accountancy firms that offer payroll services.
It enables them to deliver a seamless service to their clients, potentially add extra value through the provision of additional reporting and convey a modern, professional brand.
“It’s part of our strategy,” says Walker. “Our software is updated when new legislation is passed, so that even if you yourself missed something in the Budget, the payroll software will have the latest rates – for Statutory Sick Pay and maternity pay, for example.”
“We have excellent, up-to-date software and support that we can offer to our clients,” says Paterno. “Making this available at their disposal is beneficial for us and for our clients.
“For us, it shows our clients that we have made the necessary investments to produce a high-quality service.
“For our clients, it provides a lightning-fast and accurate service when it comes to processing complex payrolls.”