10 things to consider when choosing a payroll solution

10-INSIGHTS

In today’s business environment, selecting the right payroll solution can be challenging. Having a robust, efficient payroll system is a significant investment and vital to the success of any business. Payroll systems should be a profit-critical and tax compliance asset.

Here are ten things for you and your management team to consider to help you make the right choice.

1. Consider your long-term ROI

Payroll accuracy, combined with strict leave management and employee empowerment all contribute to ongoing Return on Investment (ROI). In order to capture these ongoing savings – typically anywhere between 0.5% – 1.5% of annual payroll spend – initial investment in implementation is required. Consider the likely 5-15 year lifespan of the solution and the potential accumulated savings that may exist.

2. Involve your payroll officer

Payroll management involves many specialised skills and your payroll officer is uniquely qualified to offer insight to your business’ needs. By involving them early, the particular needs of your organisation can be taken into account. Plus, you gain valuable buy-in from those who will ultimately have to work with your chosen payroll solution.

3. Prioritise vendor partnership

Tax and employment laws are continually changing and being updated so your payroll has to keep pace. The relationship with your payroll provider needs to be an enduring one. To ensure the stability, relevance and ongoing compliance of your solution, select a vendor with the depth, resources and commitment to deliver on a long-term business partnership.

4. Consider your future needs

Look to the future. Try to envisage what other capabilities your business may need in five or ten years from now. If your vendor can provide for those future needs today, chances are they could help you take advantage of additional modules and enhancements when you need them.

5. Secure formal confirmation of local tax compliance

Local tax compliance should be a given, but this isn’t always so. Many businesses still wrestle with manual award interpretation following a new payroll system deployment. You can eliminate this serious business risk by getting written vendor confirmation of tax compliance for the regions in which you do business.

6. Minimise solution fragmentation

Ideally, one fully integrated database is best, particularly where it involves core payroll functions including Payroll, Time & Attendance and Employee Self Service. Try to avoid fragmented databases so that data conflicts are kept to a minimum and version updates can be applied without incident.

7. Embrace configurability, but avoid customisation

Configurability enables your system to reflect the distinctive needs of your business, which helps improve ongoing productivity and accuracy. On the other hand, unique customisations and one-off ‘workarounds’ may lead to issues and complexities with version updates that need to be applied later.

8. Invest in implementation and training

Payroll projects are complex. Implementation, project management and training typically comprise the largest cost components of an upgrade project. Consider investing with an experienced implementation team that can substantiate a relevant, recent and successful track record.

9. Talk to relevant referees

For payroll deployment projects and client support, history is reality. Before making a final commitment, engage in meaningful discussions with vendor-supplied referees on their customer experiences. (Make sure referees provided are using the same solution you are looking to buy.) Contacting at least three recent clients of similar size will help you verify that what the vendor promotes is accurate.

10. Avoid unrealistic timeframes

Last, but not least, remember that the first phase of a complex payroll deployment may take three months or more to complete. Where possible, begin market exploration early. This can ensure sufficient time remains to allow your vendor to dig deep into your business processes. In this way, ROI opportunities will be maximised and ‘go-live’ disappointments should be avoided.

 

To find out more about our payroll solutions, contact the MYOB Enterprise Solutions team in Australia or New Zealand.

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