Payroll software is a type of system that is designed to automate the employee compensation process for human resources (HR) departments, accounting practitioners and finance teams.
A payroll solution is often considered a subcategory of a fully integrated HR software suite, which encompasses all operations and processes related to employee, workforce or human resource management. While there are plenty of standalone payroll systems available, this type of software solution is often integrated into much larger HR software, accounting software or human capital management (HCM) software platforms. Payroll software is mainly used by businesses and accounting firms that offer a payroll service to outside clients for managing and processing employee salaries and wages, time and attendance, bonuses and benefits, deductions, sick leaves and paid-time-offs (PTOs), vacation accruals, perks, payroll tax compliance and even healthcare insurance.
Payroll systems come in all shapes and sizes, serving different types of companies and organizations across the spectrum. Regardless of the type of business operation you’re running, if you want to pay your employees accurately and on time, while keeping compliant with the current tax rules and regulations, you will need some type of payroll management solution. The key difference when comparing the different types of payroll software, especially when it comes to small, mid-market and large businesses, is the scalability of the different functions that the system offers. For businesses with hundreds or thousands of employees on payroll, for example, a payroll solution with enterprise-grade capabilities would definitely make the payroll process a whole lot easier and more efficient. This is what enterprise payroll software is intended for.
When it comes to any type of business process software, there is no such thing as a one-size-fits-all solution. This includes payroll software solutions, also known as payroll management software. Every business has unique requirements to run payroll in a way that is more practical and cost-effective for them. Payroll management is a crucial aspect in any business operation, regardless of the size of your workforce. However, if your organization employs hundreds, if not thousands, of workers, it’s important that you have the ability to pay those employees accurately and on time. If you’re managing payroll on a large scale, then opting for enterprise payroll software is a logical course of action.
Businesses and accounting firms that are looking to acquire enterprise-grade payroll software are the type of companies that want to expand their payroll operation beyond the human resources department and into what is referred to as an enterprise resource planning package. This approach works to incorporate several aspects of workforce management such as talent management, full-service payroll processing and in many cases, the HCM system. With ERP, companies can ensure seamless integration between their payroll services and other core HR functions, as well as their accounting and finance and other department-specific solutions.
Like all forms of payroll software, enterprise payroll solutions work by providing you with a user-friendly interface to allow you to run payroll as efficiently as possible, even when you’re dealing with thousands of employees. Enterprise payroll software is especially useful to accounting firms and professionals that provide managed payroll services to a lot of business clients with a fairly large workforce of more than 200 employees. It gives them the ability to effectively scale their payroll management and processing capabilities according to the size of their client’s workforce.
As in most SMB payroll software, enterprise-grade payroll systems will help you automate your payroll calculations, manage overtime and absence tracking and ensure consistent regulatory compliance. This type of software lets you manage the different aspects of your payroll process, including salary, overtime and sick leaves, regulatory compliance, as well as the collaboration aspect. With salary or employee compensation, payroll software can help automate the tasks associated with cash reimbursements, advances, tax and insurance deductions, as well as the complete and final settlement calculations. The software may even have salary templates with specific fields for deductions, allowances, benefits and clearly divided payroll taxes.
When it comes to sick leaves and overtime, enterprise payroll software has the ability to capture time and attendance, as well as leaves and overtime. The system does this by gathering data from employee self-service portals or via seamlessly integrated third-party tools. Enterprise-grade payroll solutions will typically offer customization for leave policies and holiday lists; i.e., they can automate leave lapsing, leave encashment and carry-forward.
Regulatory compliance is arguably the biggest aspect in payroll management and processing where large multinational companies will heavily rely on their enterprise-level payroll software to avoid costly fines and penalties. While there are a few SMB payroll solutions that offer some type of regulatory compliance feature, every comprehensive HR software suite, ERP systems package and enterprise payroll software incorporates this specific function into the platform to make sure large companies and organizations operating in different states, regions or countries are completely protected when it comes to compliance.
This feature automates the filing of tax forms required in the local, state or federal level. This includes forms such as W-2s, 940s, 941s and 8974s. The payroll software will even have some type function that will enable you to share these forms automatically, with your employees, outsourced freelance professionals and contract workers. You can then easily generate detailed reports in order to monitor compliance.
Collaboration is another aspect that is crucial to large companies and organizations where an enterprise-level payroll solution will prove its value. With the right enterprise-grade payroll software, you will have the ability to create workflows that will easily integrate staff members from across different departments like administration, auditing and accounting, human resources, legal and finance. This enables interdepartmental collaboration when it comes to employee information. It also allows each department personnel to contribute to a given process at the appropriate stage, thus preventing delays or bottlenecks throughout the entire payroll process.
There are definitely several good reasons for large businesses and organizations to implement the right payroll software that can more than handle their complex payroll requirements. For a company with a large workforce, tasks that revolve around human capital management can be a significant challenge that will consume an exorbitant amount of time and resources.
However, good enterprise payroll software can help HR teams and accounting professionals run a pain-free payroll process. This is arguably one of the key reasons for large enterprises to implementing the appropriate payroll system so they can automate and streamline all their payroll processes. Payroll management often consists of labor- and time-intensive data entry, more so in a large company than a smaller one with only 20 or so employees. So, if you want to pay your employees more accurately and on time, you’re going to need a tool to help speed up the process.
An enterprise-level payroll management system can help companies save a significant amount of time in several ways. Mostly though, the right payroll software can help save time through automation. Since it can automate most of the payroll processes, there are very few tasks left that require manual processing by authorized personnel. For instance, an enterprise payroll solution will often have some type of feature that allows users to allocate extra time and resources to other more productive tasks while the system is calculating and managing salaries, payroll taxes, withholdings and bonuses.
Most enterprise payroll software can also provide you with access to qualified experts in the fields of payroll management, accounting and compliance. For the most part of the process, payroll management and processing involves repetitive tasks and meticulous work, which can be easily mitigated with effective automation. However, there are certain aspects in payroll that can become relatively complex and overwhelming, especially in an enterprise-level payroll process or when it involves federal tax calculations and compliance. To facilitate this, some enterprise payroll service providers and vendors will offer access to an individual or team of experts to provide assistance.
Perhaps where an enterprise-level payroll solution can be most useful to any large company is in regulatory compliance management. This category of payroll software is often equipped with the tools and capabilities to guarantee compliance when it comes to filing payroll taxes. Difficulties and complications in tax filings are not unheard of in business operations of any size. However, when a large multinational organization makes a clerical error when filing taxes, they may suffer heftier fines and more severe penalties than a small or midsize business might.
Human error, incorrect payments or late payroll tax filings can have heavier consequences for large enterprises. This is why enterprise payroll software systems are constantly updated with the most recent information with regard to tax laws in different localities, states or even countries. For example, if you’re an accounting firm that provides custom payroll services to clients in other countries, you need to make sure your payroll software is up-to-date with their country’s tax rules and regulations to ensure proper compliance.
Managing and processing payroll for large companies with hundreds or even thousands of employees is for sure overwhelming and difficult work for anyone or any team without the right enterprise payroll software to automate most of the tasks and processes. You will need a payroll management system that not only has the core features you want, but also offers a few advanced capabilities that scale with your payroll requirements.
From automated, unlimited and off-schedule payroll runs to comprehensive payroll analytics and reporting, self-service employee portals, regulatory compliance and multiple avenues for paying workers; i.e., direct deposit, printing checks and pay stubs, finding the right payroll system that can support your organizational requirements is crucial.