While finding and managing the best employees is a challenge, handling their compensation is a whole new ball game. For small businesses, where resources and time are valuable currency, payroll software in India has huge potential. By taking over routine tasks, it enables employers to find and retain the best talent.
Payroll software digitises the process of calculating paychecks by accounting for logged hours, taxes, insurance, incentives and other benefits. Using it:
- Reduces errors
- Saves time, freeing staff for other tasks
- Improves payroll accuracy
- Allows on-demand changes to the compensation structure
Most payroll programs offer easy-to-read dashboards for employees to view their pay break-up themselves. This further reduces the time staff must spend answering questions.
5 things to look for in payroll software
Payroll software is a decision that should not be taken lightly. As you review your options, consider these five things.
- Customization and features.
- Cloud capabilities.
The right payroll software will result in better efficiency as well as cost savings. Take your time in making the right choice.
Finding the right software for your business
Today, companies are spoilt for choice, with a host of vendors selling payroll software in India. It can get quite confusing to cut through the noise and to find the right vendor that serves your unique business needs.
Let’s consider the top factors to be considered while choosing the right software.
1. Customization and features
With the large number of advanced payroll options available today, businesses must look at the degree of customization a vendor offers and beyond just their basic features.
The ability to provide different levels of access to various team members is a valuable feature.
This will help the finance and HR teams to tweak the software as per their needs, instead of waiting for tech support or having to learn new modules.
In addition, new features like mobile-friendliness or faster alignment with regulatory changes can reduce hassle for the operations team.
2. Cloud capabilities
Cloud computing is becoming the default way to go. With cloud, software and systems reside on the internet rather than on a local network or computer. So updates can be done through mobile or tablet — even when the staff member is not in the office.
Staff can use a cloud-based payroll system anywhere they can access the internet.
It also allows collaboration where many people, regardless of their location, can work on the same report or update a single timesheet at the same time.
This clear shift from desktop-based functioning is enabling more self-serve behaviour among employees and higher efficiency for the business.
The improved collaboration and transparency of cloud-based software is offset by increased security risks.
Look at it this way: as long as a software is installed only on one non-networked computer, in only one office across the globe, it is immune to hacking. A thief would have to break into that office and gain access to that computer to harvest the data contained in that software.
Names, addresses, Aadhaar numbers — these are like honey to hackers.
Security in terms of data or employee identity protection must be taken seriously by Indian enterprises.
The best approach is to check industry standards with each payroll software vendor. Then compare them with the safeguards being offered, either through encryption or the latest security certificate authorizations.
Learn more about small business security, including how to review a potential vendor’s security protocols, in this post.
Budgeting for good payroll software is a part of the vetting process. Thankfully, given a host of competitors in the market, most businesses are in a position to negotiate and arrive at budget-friendly quotes.
Companies must also weigh the cost-vs-benefit ratio as they decide between choosing a better-reputed vendor promising greater value, as opposed to less-expensive vendors.
Pro tip: If your decision comes down to a question of cybersecurity, always go with the most secure vendor. Most small businesses that suffer a data breach go out of business within six months of the attack.
India is regulating itself better, with increased supervision and stronger addressal mechanisms.
Cloud software that allows secure data storage and live sharing with authorities is worth a second look.
Customers and employees today are require businesses to prioritise governance measures for data management. So as you compare your software options, gauge the level of regulatory monitoring and tax-filing capabilities offered by each vendor.
Benefits of using payroll software
Compensation of the company’s workforce is often assumed as a non-critical activity. But nothing could be further from the truth.
Let’s take a look at the benefits of using payroll software to handle this key task:
Automates routine processes
Although this is implied, payroll software in India must offer a host of automation capabilities to be recognized as a good option.
The software should automatically perform all rule-based tasks that are repetitive in nature, like:
- Converting complicated salary structures into worksheets
- Reporting inconsistencies in tax returns by employees
Employees today expect payslips to be generated by default and consider it an important indicator of a transparent company culture. For payroll teams that handle a host of salary structures with variables, payroll programs generate both customized reports and simple templates like payslips.
Additionally, payroll software can can quickly generate reports for PT, MIS, reconciliation and other purposes.
Payroll software can empower employees to understand their:
- Current compensation
- Worked hours
- Tax brackets and more
To prevent endless email exchanges between them and the payroll teams, self-service capabilities allow users to answer queries themselves.
Covers regulatory mandates
As work schedules become busier, it is quite annoying when employees see the mandatory tax filing email.
But these mails are quite critical and are a double-edged sword. Staff not responding risk losing financially, while firms with too few filing submissions risk facing regulators’ scrutiny.
Thankfully, digital payroll systems can create timely reminders, and use automation to generate reports, file taxes or post investment deduction details.
The importance of payroll software in India
Enterprises today are faced with a lot of employee churn, and public review platforms make it obvious to the talent market how each business manages its employees.
Accurate, secure, compliant compensation is key to good employee morale and loyalty. Using payroll software in India relieves the finance and HR staff from engaging in mundane tasks. It not only improves efficiency but raises the bar on employee satisfaction.
Firms are well advised to thoroughly review their software options and choose wisely for maximum benefit. A right choice will serve the company for years to come.