If you are dissatisfied with your current payroll system, be it a PC-based software program or a manual set up, there is much to consider as you review your options and try to decide where to go from here…   

Read more to consider our 10 Top Tips to help you choose the right payroll software for your computer:

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1. Consider carefully the differences between Online (internet based) and Offline (loaded onto your computer) payroll systems

One big difference is accessibility. Offline PC-based software is loaded onto your computer, so you can only manage your payroll from that one place. Whereas with an online payroll system you can simply log in from anywhere, at anytime, on any internet capable device (like a tablet, or even on your flash new smartphone).

Another big difference is security. With PC-based desktop software you yourself need to manage all back-ups and take care of storing your payroll data where it will be safe, be that manually on a disc or flash drive, etc. But just imagine if you had a fire at your office, or even a bad earthquake. If your office PC was destroyed would you be able to completely recreate your payroll system? With online payroll you don’t need to worry about any of this as all your data is safe and secure, backed-up every day as part of the service, and always accessible – as above.

2. Understand the true costs of Online vs Offline 

At first glance older style PC software can appear cheaper, as you pay once and then you own it, but you need to consider its hidden costs. Remember that you will usually have to pay extra for necessary updates (whenever the IRD changes legislation that affects payroll, or simply when the software developer needs to fix something) and usually there are additional costs associated with Support (some even have 0900 numbers) which is usually limited to technical assistance about the software and may not include help with actually managing your payroll.

Most online providers offer an ongoing payroll service, rather than just a software program for sale. Your online payroll monthly or annual service fee will generally include any support you may need (in both using the software and advice about your payroll obligations) and any updates the online system needs will be performed behind-the-scenes automatically, at no extra charge. And always remember, with online software you don’t need to be a computer expert – nor do you need to employ an IT Department – to keep your system running. That’s a massive cost-saving straight away . . . 

3. How functional is it really?

It’s not just about having a slick website and claiming to be easy-to-use. A good, highly functional payroll system may actually look a little bit complex at first – but this is only because there are so many complexities involved. As well as calculating PAYE, kiwisaver, a multitude of variable deductions and allowances, and appropriately managing payments for full and part-time employees (plus contractors and more) it is vital that your payroll system will enable you to effortlessly manage employees leave accruals and entitlements – and you must be able to store and access each employees entire history (not just the last year) when needed. And all of this information should be easily extracted into a report both quickly and accurately.

4. Does it guarantee compliance to current IRD legislation?

You would expect this to be a given, but it’s not always the case. You need to be certain that your payroll system is regularly updated to comply with any legislative changes imposed by Inland Revenue – as and when they happen. That’s awfully difficult with your typical PC-based desktop computer software as it is reliant on you (or one of your staff) manually upgrading the system from either a disc or a download (which you will probably have to pay for). And not all online systems are created equally either. Some look nice, but aren’t supported by people who really understand payroll and pay legislation. Be wary of who you put your trust in. An IRD accredited PAYE intermediary is fully qualified in the dark arts of payroll and should be your first choice.

5. Will its report options actually meet your needs?

Don’t underestimate the power of good reporting functions when making your comparisons. Paying staff is likely to be one of your company’s largest expenses, if not the largest expense, so you need to ensure that you (and/or your accountant) are able to stay on top of it as easily as possible. A simple example is keeping a close watch on your leave liability to ensure you don’t get stung with a huge pay-out requirement if a long-term employee suddenly resigns with a large amount of leave owing. Good reporting will allow you to ensure this potentially crippling cost can be monitored and managed as you go.

6. How secure is your payroll data going to be?

While it is vital to ensure that your payroll information is regularly backed-up, you also need to consider your legal obligations around your employees’ rights to privacy. Does your PC have a secure login? Is that installed PC software password protected – and/or is it encrypted if someone does get into it? Most online payroll systems include data encryption as a standard, and they back-up (to an off-site server) as you enter your data. So they are significantly more secure than PC-based software, or a manual spreadsheet or paper system, which can easily be accessed by an intruder in your office – or lost forever in a fire or any other natural disaster. 

7. Will it interact nicely with your preferred accounting or time-clock system?

Even if you don’t have enough employees to warrant a time-clock set up, you almost certainly have some kind of accounting software (either online or offline). Make sure that whatever payroll system you choose will allow you to export your payroll info across quickly and easily. One click may sound great, but it doesn’t always transfer over the level of actual data detail you may need. Be wary and check first.

8. Who can access it, and how much can they see?

We come back to privacy here, but balance this with time-saving efficiencies. Would it be handy for your employees to be able to log securely in via the internet and view their own payslip info, such as their leave balance? Or even print out an annual Certificate of Earnings themselves? We would suggest this presents a more efficient approach than you having to manually respond to each employees requests for information every time.

And remember your accountant. The better online payroll systems will allow your accountant to securely log directly into your payroll reporting suite and download whatever data they need to balance your books – without the additional bother of you having to pull reports and email them off. A major time-saver for everyone.

9. Will you really receive knowledgeable and friendly support?

There’s only one way to gauge this . . . call them up and have a chat before you buy. It only takes a few minutes to make sure that you’re actually going to get support desk help from people who will treat you right – and who know what they’re talking about. Don’t assume that they know as much as they claim. Pick up the phone and speak to someone first. 

10. Get a quote

Every payroll solution you look at will be a little different from the next – and the variable pricing structures between each one can get a bit confusing. First make sure you do your due diligence on what you’re actually going to get for your money and then ask them for a written quote. This way you’ll be able to look at the true bottom line, the actual total annual cost of the system to your business, before you commit to anything.