Evaluating a Payroll Software Solution

By Stephanie Salavejus, CPP, PenSoft

PenSoft is committed to educating businesses on the importance of payroll and the process of selecting the correct software solution to meet their company’s needs. PenSoft represents the concerns of their customers by actively participating in the American Payroll Association and the National Association of Computerized Tax Processors.

One of the greatest challenges companies face is purchasing software best suited for their business, and replacing payroll software can be one of the most challenging. The responsibility for selecting and evaluating new payroll software packages often times falls on the Payroll or Human Resources department. Due to improper planning and time constraints, many companies find themselves scrambling to find a payroll software package at the last minute to satisfy the needs of the company without involving a tremendous learning curve.

Payroll software is more than a database used to store payroll calculations. You are purchasing an application expected to do accurate tax calculations based on complex formulas, generate reports to be filed to federal, state and local taxation agencies, and produce reports to provide a cost breakdown for one of the largest expenses most companies incur. Due to the complexity of payroll, the purchasing of payroll software requires extreme attention to detail. The software must satisfy the company’s particular needs now and in the future. This process can be time consuming and at times overwhelming. There are numerous factors to consider when evaluating payroll software applications.

Upgrade current software or purchase a new solution

Should you upgrade the current software or purchase a new software package? This generally is the starting point for the evaluation process. Upgrading the current software will depend upon the software manufacturer. Ask if your current software provider has an upgraded version and request a demonstration. Determine if the upgraded software will accommodate future expansion and reporting requirements. Is the software keeping up with the demands of the industry? If the answer to any of these questions is no, then it is time to start looking for a new payroll software.

Features and Functions

Develop a list of functions and features required for processing the company payroll. A software package with hundreds of bells and whistles is worthless if it is complex and difficult to use or if you cannot get the needed information out of the system. Look for functionality and flexibility. Make a list of essential and required reports, and then make a list of items you would like, but are not necessarily vital. If you process multiple state payrolls, ask if the additional states are included or if you need to purchase each state individually. Look for the ability to customize reports for your company's particular needs. When reviewing the customizable reports, ask if the process of customizing the reports is easy and quick. Does the software provide general ledger information? Are export features available? Time invested in obtaining the necessary information is very important to avoid a false start with software not capable of satisfying all of your company’s needs. Time spent setting up a new system and training your employees takes away from their primary functions and must be kept to a minimum.

Integration

Will the new payroll software package integrate smoothly with the accounting system and other software packages you are currently using? It is rare there will be a conflict between two different software packages, but it is wise to run your other software packages after installing the new software to make sure everything will run smoothly. Some software packages make changes to your printer setup affecting the print out of reports and checks in other applications. Take the time to open and run other applications on the system prior to going live to reduce the risk of potential problems.

Licensing Agreements

Inquire about licensing agreements, software maintenance, and updates. Ask about the cost of multiple licensing agreements and software maintenance. Inquire if updates are automatically sent out for changes in the tax code and if there is an additional cost for the update. Each software manufacturer has their own policies regarding these issues. Communication is the key to understanding the cost and requirements to comply with the software agreement.

Program Support

Customer Support is a critical aspect of purchasing any new software. Take time to talk to the technical support staff prior to making your final purchasing decision. The most important question is the accessibility of technical support. Determine the hours of operation for technical support and the method the company uses for handling support calls. Do you speak directly to a support technician or do you have to use a menu system? What is the anticipated response time for support? Inquire about the qualification of the support staff. Ask for references of customers so you can talk directly to another end user. What is the cost of technical support services? Look for a software company who is prepared to offer the highest quality of technical support from trained personnel.

Future Growth

Technology is constantly changing and it is important to make sure the software package is capable of handling the current and future demands of your company. Inquire if the software is an annual subscription renewal or will the company be responsible for updating the tax tables. This can have a big impact on the time it takes to implement an update. New software should be tested on your network system and with current hardware prior to purchasing. Even though the type of network may be the same, from company to company the setup can be as unique as the individual company. Information specialists each have their own method when setting up a network or installing hardware so it is important to see the impact of installing new software. Evaluation copies of the software can allow for this type of testing.

Software Training

Education and product training is an ever-expanding market. Training can greatly decrease the learning curve involved with a new payroll software package. Inquire about training packages available. Training formats are unlimited. Customized on-site training programs can be expensive depending on the level of training offered. Many software manufacturers' are now offering web-training seminars. This can be the least expensive and most convenient method of training for your company. Most software packages offer extensive on-line help to assist customers in setting up and using the payroll program.

Assistance is available

PenSoft understands the purchase and installation of a new payroll software package creates challenges. We help organizations every day with this decision. The guidelines discussed above will help in the software evaluation process. We strongly encourage organizations to involve the end users in the software purchase. This ensures the chances of purchasing a payroll software program best suited for the company's needs. Having the ability to communicate and ask questions regarding the use of the software, and being involved in the selection process will reduce the anxiety associated with learning a new payroll software program. When employees are involved in the selection, implementation, and training of new a software package, organizations realize a better return on their investment and increased productivity.

PenSoft has built a solid foundation with our customers based on communication, teamwork, and trust. The employees of PenSoft all work toward a common goal: producing the best value in payroll software with unsurpassed program support. Our specialized knowledge in payroll software has helped our company grow extensively over the last 20 years.