When Should Payroll Managers Switch Their Payroll Software Solution?

When Should Payroll Managers Switch Their Payroll Software Solution?

In an economy like Ireland’s, paying your employees the right amount every payroll run as well as ensuring that they are never paid late takes planning. Many Irish businesses spend a lot of time and resources on getting their payroll right because they know how damaging it can be to employee relations if they don’t. However, this doesn’t mean that commercial savings can’t be found by adopting more streamlined approaches that still deliver the required accuracy within the weekly or monthly time limits that payroll necessarily needs to run to. Under such circumstances, CFOs, as well as MDs and payroll managers, often start to think about upgrading their systems. Typically, this will involve changing payroll software.

 If this is something you are starting to see the commercial benefits of doing, then the next questions to ask are how can you go about making such a systemic change in a seamless way for your other financial operations and when is the best time to go about it? With Snow’s Quantum payroll solution, the entire approach taken to shifting from a legacy system makes for a smooth transition. Emphatically, this isn’t something you can say with all payroll software systems on the market today. Read on to find out how and when to make the switch to Quantum and the benefits of so doing your business will enjoy.

 When Is the Optimal Time to Change Payroll Software Providers?

Given that the financial year starts in January for many, it is best to prepare for a switch of any payroll system in the run-up to Christmas. Of course, corporations that have a financial year that ends each March instead should try to coincide their shift with their calendar. The reason that switching in line with a financial reporting period is that there is usually sufficient time to deal with year-end processing and then get the new system in place by the time pay needs to go out at the end of the following month. In Ireland, this will often mean getting an additional week or so to sort out the training issues that may arise from such a switch because many companies pay their December salaries a little earlier than usual in time for the festive season.

 This all may sound very practical but here is a second reason why making a switch coincide with a tax reporting period is useful. This way, companies will not have to carry over any of their historical data from the current tax year into the following one. In other words, businesses get a clean break for tax purposes. Problems caused by compatibility or human errors in the transition shouldn’t, therefore, result in unwanted issues connected to employees’ personal tax. Nevertheless, waiting until the end of the year to change from one software system to another may be impractical for some Irish firms. If they’ve taken on too many employees for their current system to cope, for example, then delaying until the optimal time to switch would be a false economy. Therefore, it is best to make the shift at the end of a reporting quarter if waiting until the end of the financial year is impractical.

Advice for Changing Payroll Software in the Middle of the Financial Year

Given that some firms will need to change their payroll providers mid-year, then compatibility between the legacy system and the new one is going to be crucial. The more data that can be migrated automatically from the old system to the replacement one the better. All other information will need to be entered manually, something that can be time-consuming and costly. The good news is that Quantum Bureau, Enterprise and Cloud have all been designed to make backwards compatibility with commercial financial software a top priority. Usually, our software has already been proven to work with the desired cross-compatibility. Importing historical data from the current tax year can often be completed automatically and – even more crucially – checked to ensure that the migration has been completed accurately. Note that even with a relatively modest workforce, historical salary data can go back many years and this increases the risk of human errors with any data that isn’t inputted automatically.

 At Snow, our payroll software already integrates with many financial packages, such as Sage, Microsoft Dynamics, Pegasus and more besides. Equally, importing data from compatible time and attendance systems, such as Mitrefinch TMS, Softworks and Timeworks, is possible. If you use HR software to hold data on overtime and other matters relating to pay, then it is also good to know that Quantum integrates well with systems like SAP, Workday and Oracle HCM, among others. Of course, you may run none of these packages but the key thing to look out for when switching payroll software providers in the middle of the year is that you are choosing to move to a system that offers a high degree of integration flexibility.

 Finally, it is worth remembering that most providers are professional and do what they can to make importing data from one system to another as streamlined as possible. Not all software providers fall into this category, however. Therefore, prior to any proposed switch, financial and IT directors should be focussing their efforts on establishing whether or not there is something in their current contract that might mean incurring a penalty for changing suppliers. In some cases, a notification period is expected or a one-off payment to the old supplier may be needed. To avoid such additional costs, make sure the small print doesn’t include anything unwanted.

Your Payroll Software Checklist

Like any systemic change in an organisation, planning is the key to a smooth transition between an old way of doing something and adopting the new way. Even though a new payroll software solution might reap numerous benefits down the line and is consequently worth doing, it can necessarily cause short-term pain. Therefore, choosing the best time to make the change is just as important as having a plan you know you can stick to. For the majority of Irish firms seeking a new payroll solution, they should be primarily concerned with the following points:

 – Research into the new payroll company’s solution and what it offers. It is no good going through a change management process – even one that is managed well – if you will need to go through a similar one soon afterwards once more. Understand your current and future payroll requirements and seek a software solution that is up to the job.

– Testing is crucial. Running the new system alongside your current one for a month – or two, in some cases – will prove it works and offer you the chance to tweak any integration or data importation issues that may arise without being reliant on one system solely.

– Collaborate with other decision-makers in your organisation. SME owners may not need to do this, in fairness, but larger organisations should understand that payroll reaches into all areas of a business, not just the finance team. CEOs, CFOs, IT directors, human resource managers and operations directors all need to have their say alongside payroll managers.

 – Conduct a final review of your workforce’s payroll records. Once all this information has been added to the system – manually, automatically or with a combination of both – a final review is a good idea to help double-check everything prior to the first payment run using the new software.

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