Payroll software is often the most undervalued element of an organisation's software stock, yet its efficiency is vital in ensuring the smooth running of business, writes Sharon Tayfield, operations director at Praxima Payroll Africa Systems.
Changing payroll software can prove disruptive, yet it has to be done when an alternative solution offers the opportunity of better performance in the long run.
There are several considerations that need to be taken into account when planning to change payroll software in order to make the transition as seamless as possible.
* Timing – There is a common misconception that payroll software should be changed at the end or beginning of the financial year. The perceived advantage is that no historical data needs to be imported and the system starts the new year with zero balances. However, waiting until the 1st of March is actually unnecessary as year-to-date totals can be easily imported into the new payroll systems. Many payroll software companies can carry out the transition smoothly.
* Parallel runs – A parallel run is of course advised but not crucial. It provides peace of mind at the very least. However, many organisations insist on multiple parallel runs over several months when, more often than not, a single parallel run is sufficient. From time to time the older or legacy payroll generates information that differs from the new payroll solution (with the errors usually residing on the legacy solution), which protracts the process of going 'live'.
* Resources – A new system requires resources – people with the right skills to implement and maintain the system. When moving to a new system, organisations should determine how much training is necessary and how best to use their resources. It is vital that the payroll provider also provide a strong support service and offer assistance should any problems arise due to lack of resources, and/or teething problems.
* Updates – One would assume that a payroll would have the latest tax updates but this isn't necessarily so. It is essential to ensure your payroll partner is up to date with the latest tax calculations and regulations, and that they regularly update any changes as they occur or are released.
* Integration capabilities – It is important to ensure that new payroll software integrates with your organisation's existing HR and accounting software. This is something to bear in mind when choosing a new payroll. It should be based on 'open architecture' that promotes integration and interoperability. Due to the overlap between HR, accounting and payroll, it is convenient for all three systems to be 'synched' for several reasons: discrepancies are prevented; unnecessary paperwork avoided; and consolidated reporting is made possible.
* Customer support – Aside from offering support during the implementation phase, it is important to choose a payroll software company that provides continual customer support. Problems can occur at any time and support needs to be timely and effective. Look for a payroll organisation that offers a 'dedicated' payroll support person rather than a contact centre where different resources respond to the calls. Having a dedicated support person means a relationship is built with this person and they become familiar with your business and payroll. It is this ongoing relationship with a particular support person that really makes a difference.
* Vendor stability/ references – After the South African Revenue Services (SARS), a company's human capital is its biggest stakeholder. Choosing a payroll partner is therefore a decision not to be taken lightly. Ideally, an organisation should look for a payroll solution that will meet its needs for years to come and feature scalability to accommodate future growth. It is prudent to obtain verifiable references as they will provide peace of mind that you've made the best decision.
Moving to a new payroll system should not be fraught with anxiety and anticipated teething problems if the above issues are considered. If the research is done thoroughly and the migration is properly planned, a smooth 'transition' can be expected.