Types of Payroll Management Software

Payroll management software may be categorized by a few main classifications; cloud vs. enterprise, general vs. industry-specific, as well as according to business size. However, there is another way to fundamentally classify payroll management systems—one that focuses on the basics of the platform and the impact it may have towards company workflows.

Dedicated payroll management software

Dedicated payroll management software solutions are often referred to as standalone systems. They go above and beyond when it comes to delivering robust features and capabilities that address the core processes typically involved in payroll and other HR management functions.

The majority of dedicated payroll management systems come with specialized functions that are beneficial to HR teams and departments. These features include time tracking and employee attendance, customized reporting, and tax and benefits management.

In order for a dedicated payroll management solution to be considered as a good product, it has to have the capability to seamlessly integrate with existing solutions—most specifically human resources management (HRM) and accounting systems.

Dedicated payroll management software is a popular type of solution that is typically used by a number of small and medium-sized businesses and payroll service providers.

Integrated payroll management solution

Integrated payroll management solutions are often included in other HR management platforms that have comprehensive features and capabilities covering multiple functions.

Accounting, human resources management, and payroll are key business processes that typically overlap. As a result, services and software products that cater to such processes often provide customers with the option to integrate various modules designed to address the needs of each individual organization.

Whether it’s an accounting software system, HRM, employee management solution or a company-wide business process platform like enterprise resource planning (ERP) systems, payroll management is generally among the core features found in those types of business solutions. Alternatively, they may come as an extra or an add-on feature, along with core tasks like payroll processing, paycheck printing, and income tax calculations.

How to Choose Payroll Management Software

Getting a payroll management software solution requires a few key considerations. These platforms come in many different packages, such that some are available as an extra feature in ERP, HRM, and accounting systems while others are available as an independent standalone solution, as previously mentioned.

Before committing to a specific service, vendor, or subscription plan, take a look at these deciding factors to help make sure you get the best value for your money:

Cost of ownership

With organizations (regardless of size or industry), operational cost, cost of ownership, and other company expenses are a constant balancing act. You can spend money to earn money, but you can’t spend too much that you lose your bottom line.

When it comes to payroll management software (or any other software solutions for that matter) there are a few options available in getting them: a one-time licensing fee or a monthly, quarterly, annual, or bi-annual subscription. Not all vendors offer such options, but when you look around for software pricing, these are the payment options that you will typically find.

What businesses have to consider is which type of payment they are comfortable with. However, there is another type of cost that needs to be taken into account— the cost of ownership. How much will the software solution cost to operate, maintain, and manage over time?

Cloud-based service or on-premise deployment

Another factor you have to consider when getting payroll management software is how it will be deployed in your business. Some software systems are deployed as an on-premise application, while others are provided as a cloud-based service. There are pros and cons to these two different deployment methods.

On-premise deployment is typically more costly than the cloud-based option. It requires a significant investment in terms of licensing and servers, in-house technical personnel to handle installation and maintenance, and downtime for system upgrades.

The advantage with on-premise, however, is that all the sensitive company data will remain in-house. Also, there are no recurring costs with on-premise deployment.

Cloud-based payroll management software, on the other hand, has low capital investment. This means it has a very low initial cost of deployment. All you have to do is pick the subscription package you want, subscribe to the service, and you can start using the product. Everything is done via the cloud, so there’s generally no downloads or installations required.

Cloud-based services also offer regular updates to the system, they are relatively simple to set up, they don’t require extensive maintenance, technical/customer support is readily available, they offer easy access to the service using any device, they are easily scalable, and they provide flexible features.

The main features the product offers

You also have to consider the key features that the software solution comes with and whether or not they are the features that your company actually needs. Some payroll management systems offer a plethora of features and tools, but that doesn’t necessarily mean that it’s the right choice for your business. Just because a product has plenty of features, it doesn’t mean that you will get to use them all.

When trying to choose the right payroll management software, you need to focus on those that offer key payroll functions that meet your company’s unique requirements. Depending on how you, as a business, manage payroll, you should look for payroll management solutions that facilitate and enhance your specific operations to maximize efficiency.

Scalability and integration

Scalability is important, especially for a growing business. You have to be able to rely on the software solution to facilitate your payroll management processes as your company expands and your workforce grows. The payroll management system you pick should be able to stand the test of time as well as keep up with the growth pace of your organization.

Another factor that often goes along with scalability is the solution’s ability to seamlessly integrate with existing systems. The payroll management software, especially if it’s a standalone system, should allow users to seamlessly integrate it with existing third-party software that they are already using in their day-to-day processes.

Benefits of Payroll Management Software

Payroll management software facilitates any business or organization through process automation, data centralization and security, workflow efficiency, HR productivity, cost savings, customization, and integration.

The right payroll solution will enable businesses to save time and money, as well as avoid man-made errors. The system helps to ensure the right amount is paid to the right employee, it allows organizations to pay their taxes correctly, and it provides added security to sensitive company and employee data.

Payroll management software solutions also help to build more transparency within the organization as disputes will be quickly resolved through easy access to agreements, employee benefits, timesheets, and other similar data. Additionally, with such a wide variety of features and tools, users will be able to customize reports for stakeholders and authorized personnel.

Common Features of Payroll Management Software