History of payroll software
Computer based payroll systems developed in the 1950’s were definitely not online! Subsequently, technology then advanced through various hardware and software operating systems. In the later part of last century, it became convenient and cost-effective to run payroll software on a personal computer (PC). Today this represents the situation for the vast majority of payroll systems – one payroll manager operating one desktop PC. Consequently, the limitation of today’s desktop software is the one-user-one-screen approach. In other words, one payroll operator must enter every data input.
One mega-trend that has profoundly changed every aspect of our lives is the Cloud aka software-as-a-service, mobile or online. That is to say, every industry has re-invented itself in terms of a cloud platform app. Examples of software running in the cloud are web browsing, e-mail, video-streaming and on-line shopping. In fact, without the ability to share data via the cloud, nearly everything we now take for granted would not exist.
Advantages of online cloud payroll software
- Run from anywhere, on any device
- No software required
- Dedicated PC or hardware not required
- No software upgrades
- Never need to backup
- Business continuity
8 critical components of an online payroll system
- HMRC tested and recognised
- Mobile, Tablet or Desktop?
- Automatic Prompts
- Data collection and Self-service entry
- Live payslip
- Payslips and reports
- Migration service
HMRC tested and recognised
HMRC test and recognise all UK online payroll software.
Mobile, Tablet or Desktop?
Payroll systems designed for desktop screens don’t work well for tablet or mobile devices. Therefore, it makes sense to start with a mobile-first approach, where the online app is optimised for the small screen. Above all, this will make it easier for workers to adopt.
The first requirement of an online payroll system is to prompt an individual for missing input data. For example, utility companies send e-mails to prompt for meter readings. Similarly, online payroll by uses e-mail to collect data, and if there is no response, escalates with SMS. In short, automated prompts nudge everyone to provide timely input.
Data collection and Self-service entry
Self-service allows an employee to enter timesheets, absences, bank details, address changes and new starter declarations.
Online orders typically provide a 24/7 view of the expected delivery day and time. Similarly, each time a worker accesses a Live payslip, automation runs their payroll to show their expected pay. To clarify, it takes all available data to date and prepares an entire pay run in a second or so. New data, for example commissions, bonuses, time sheets, starters, leavers or changes are included in real-time.
There are several advantages of this approach. Firstly, workers can check pay and quickly identify and eliminate errors. Secondly, workers are more engaged through early visibility of pay and benefits. In summary, feedback by the worker results in zero errors, higher levels of engagement and reduced frustration.
A workflow is a business process which combines software and manual input. For example, HR systems use holiday and absence workflows. Online payroll integrates workflows directly into payroll. Once approved, holiday, sickness and timesheets provide payroll input data. To clarify, workflows operate as follows:
- Workers enter timesheets/absences via online mobile payroll.
- Managers are prompted for their approval.
- Managers approved workflows via a mobile app.
Once approved, workflows automatically become part of the payroll and visible on a live payslip.
Payslips and reports
Payslips and reports are the main output of any online payroll system as every worker, manager and administrator is a report recipient. For instance, every worker requires a payslip every pay period, a UK P60 per year and a UK P45 if a leaver. HR, finance and payroll are also key stakeholders who require reports. Traditional payroll software requires the payroll manager to be responsible for generating and distributing these reports physically or digitally. However, online payroll uses a different approach. Every worker, manager, finance or HR has online access to generate and automatically retrieve any required report. On other words, they can generate any payslip, UK P60 and UK P45 on-demand. In short, we rely self-service every day with on-line apps – it’s so natural we don’t even think about it.
Most teams have limited capacity for new project implementations. Consequently, the following steps are recommended:
- Identify a supplier who can assist with migration. Suppliers should provide software and expertise to transform existing data and processes.
- Adopt a a phased roll-out. There is often no need to migrate every department in the one phase. Importantly, this allows the organisation to establish best practices prior to full deployment.
Time and money savings with online payroll
In conclusion, online payroll means substantial savings. By automating traditional manual processes, companies can reduce internal effort by 75% and outsource costs by 50%.