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Your Guide to Payroll Automation Software

If you are on the hunt for a suitable Payroll Automation Software then this guide is for you. We'll have a brief look at the payroll function, and some of the added benefits with automation.

Payroll Automation Software- Prodoreda Software Advice

What is Payroll and HR Software?

The Payroll function of a business comprises of a set of processes and procedures that ultimately help you pay employees on time and within compliance. Payroll is processed manually in-house or automated using Payroll Software. It can also be outsourced to partial or fully managed payroll service providers. Some of the mandatory tasks include:

Calculating and paying wages, settlement of tax withholdings

Calculating annual leave or other leave entitlements

Delivery of wage calculations and certificates to the employees

Drawing up employment contracts

Providing regulatory reporting

Managing deductions for employee benefits

Processing employee expenses such as travel associated costs

Payroll is a complex and intricate function, requiring ongoing improvements, compliance with a relatively large legislation base, and a high degree of accuracy. To get this right it can be best to automate the process using either payroll software (in-house or cloud based), or outsourcing to a third party service provider.

Payroll is a subset of an overarching HR system. Where the payroll only really handles the above tasks, the HR system will handle all employee engagement processes such as:

Learning and training

Benefits administration

Time and attendance

Recruitment, onboarding, and tracking

Scheduling

Strategic HR

Performance Reviews

Most payroll software will come part of a HR suite, otherwise will integrate into any other major ERP (Enterprise Resource Management) or HR software.

Payroll Challenges

Most payroll mistakes are made because the payroll team genuinely don’t have the knowledge or training that they require to do their job. Regular training is critical as payroll legislation, thresholds and rates change every year. Regular training can also be expensive therefore in-house payroll especially that is not automated can be a very expensive cost centre for businesses.

Processing pay especially if manual or using non-integrated solutions, even Excel, is an extremely laborious task, not to mention erroneous. Business therefore over spend on staffing for payroll when they can easily substitute with automation.

Therefore it is critical for businesses to look at payroll automation software or look at outsourcing the function to a service provider.

27.3%

Australian businesses outsource payroll

-2016 Australian Payroll Association

80%

error reduction using payroll automation software

-American Payroll Association

Payroll Automation Software

Payroll functions can be automated using software to facilitate the collection, organization and storage of all information required for payroll calculations and regulatory reporting requirements. In-house payroll software can be integrated into existing ERP and other applications (e.g. document management software, accounting, sales, time sheets, workforce management) to streamline business processes further.

Some business applications, especially accounting software, also offer add-on modules that allow for suitable automation of payroll.

Web Payroll Solutions

A web-based payroll solution adds further benefits for the payroll function. With an increase in SaaS, payroll through a web based application is typically provided on a subscription basis and costed per employee. It reduces some of the up-front costs, and resources required, however can be limited in what it offers in terms of flexibility. Although customisation is rarely required for SME businesses, it may be better to seek out in-house our outsourced solutions in such cases.

Outsourcing

There is an increasing trend for Australian businesses to move their payroll functions to a managed service provider. This can help lower costs depending on your business size and capabilities. However you do lose control over the data insights and flexibility in some cases. Otherwise the costs can blow up significantly to have customisation on the service provided.

One of the biggest challenges in the payroll function is keeping up-to date with changes in legislation. Changes can be frequent and some can have a substantial impact to how payroll is performed or reported on. Therefore this can be a burden for businesses. However outsourcing the payroll function to a managed service provider can alleviate this burden as they will monitor these changes and make adjustments to the service based on updated legislation.

Benefits of Payroll Automation Software


Reduce Errors- Accurate Pay

Automating payroll has a major benefit that it ensures accurate payment to employees. Paying inline with awards and overtime, whilst considering employee benefits and leave, can all be automated. This benefit is expanded further with integration in other HR, ERP or accounting applications.


Reduce Errors- Correct Tax

Another benefit is that you know you are paying your taxes correctly. With ongoing changes to tax legislation it can be very difficult for businesses, even with payroll staff, to keep upto date with it all. With tax witholding automated through payroll automation software, businsses can avoid large penalties for non-compliance.


Streamline Processes

Payroll automation can cut down on the process of data gathering, information processing, disbursement and reporting. As well as integrating into other business systems, payroll and HR software allows you to gather key insights from pay and employee data that can be used to streamline other business processes.

Having said that, it’s also important to note looking at the payroll process to find improvements. This is often an overlooked function for continuous improvement initiatives. Simple changes and alignment to legislation can mean savings of 1000’s to hundreds of thousands of dollars, especially if there are errors in your payroll process.  


Cut Costs

Time is money, and payroll automation software definitely helps reduce the time it takes to process payslips and related activities. Automation can cut down on printing costs, such as pay slips, which with a number of solutions can be checked by employees online. It's easier to add new employees and make salary adjustments or record when an employee quits or is terminated. If tax rates change, your tax tables can also be automatically updated in a computer-based system.

It’s also easier and cost effective to create and update reporting. On top of this, reducing errors such as; incorrect tax withholdings, overpayments, or underpayments; can have substantial cost savings.


Insure Compliance

Australian taxation law is constantly changing. Tax margins and bands are always moving, and legislation is becoming stricter. Although this may be good for businesses and employees, it can be a huge challenge to remain up-to date with such changes.

51.46% of employers have no external advisory regarding payroll, so are taking unnecessary compliance risk according to the Australian Payroll Association. Not only would a company be liable to fixing any error, they may also incur penalties for failure in compliance. This makes it critical for businesses to look at payroll automation or pay-roll outsourcing.


Improved Workforce Management

Good payroll software can easily reduce the time and costs associated with managing tasks such as leave. This reduces the paperwork It enable employees to request and view their leave, whilst reducing queries, or making it easier for managers to answer queries.

Such tools also provide comprehensive reporting, dashboards or even insights, allowing you to make informed decisions in real time.

Read more about payroll automation benefits here.

What's the right Payroll Solution for my business?

As well as the above features, there are other factors you need to consider when searching for the right Payroll Automation solution for your business. Planning and choosing wisely can have a substantial cost saving for your business, upfront, and on-going.

Employee portal: does the system allow employees to manage some administration functions e.g. leave applications, viewing pay slips etc.

Integration: does it integrate with your accounting, HR, ERP, or other core applications?

Compliance: does it manage compliance? is it updated to match legislation changes?

Awards and remuneration: does the payroll software manage remuneration and benefits per award schemes?

Time sheets: does it provide online time sheeting options for staff?

Cloud: is the solution hosted or will you need to host it on your servers?

Reporting: what sort of reporting levels do you require? is reporting automated? is it updated on regulatory changes?

Dashboard: does it provide real-time insights?

Training: is training provided and using what medium? (face-to-face, group, online, phone, etc.)

On-going Support: how is the system support provided? For how long? Is additional support available?

Back-ups and data recover options: Is data backed up automatically

Choose the right payroll automation software

Choosing the right payroll software can be tricky. But you can overcome this by some simple planning.

It's important to keep in mind that setting up a system can take anywhere from few days to few months. It really depends on the size of your business as well as the complexity of your requirements. You can also opt for a cloud based solution or outsourced it all together.

We can actually make the process easier for you.

Speak to one of our friendly solution specialists to discuss what you are after and help you find the right solution. Getting your choice right is critical when it comes to payroll software. We can help you get started on the right track. There are no commitments and no costs.

What project or software solution are you seeking a vendor for?

How does it work?

When you reach out to us, we'll conduct a high level assessment of your needs and see what you need.

Together, we determine a next step

We compare your needs to our panel of solutions

We pick the top 1 to top 3 vendors depending on your needs

Vendors reach out to you to provide quote

We continue our relationship by answering any questions you may have through the sales cycle. We also work with you to conduct post implementation reviews to ensure vendors continue to provide a quality service.

 

No commitments

No cost

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