20 Best Features every Payroll Software should have

Payslips for your employees, Management Information System Reports for your Top Management, Salary Transfer Statements for your Banks, Salary Variance reports for your auditors, Income Tax statements for the Tax department, Statutory reports for the government; the Payroll Software should generate data for all your stakeholders.

The Payroll Software should provide information to the Top Management to monitor the payroll cost and to make wise decisions to control it. The Top Management should also get information on trends in employee attrition, change in payroll costs and so on.

Employee Self Service allows payslips to be published online which enables employees to access payroll information from anywhere.  Employee Self Service also allows employees to choose income tax structures and to make Income tax declarations.

The complexity of payroll increases with the number of employees. When you are managing a large number of employees, it becomes critical to make accurate audits of payroll data. The payroll software should make this process easy for the auditors by providing them enough information.

The payroll software should have provision to configure Income tax rules of different countries so that the Income tax processing can be fully automated. The software should automatically calculate income tax to be paid and should also prepare tax statements to be submitted to the income tax department.

The payroll software generates salary transfer statements that can be uploaded directly to your banks or WPS system. The payroll software makes the process easy by generating salary transfer statements in the format required by the banks.

The payroll software should allow you to create payroll heads, specify your own payroll formulae and to organize the payroll heads into multiple payroll structures. The software should be flexible enough to configure payroll in different payroll structures for different groups of employees in your company.

Employee clock in/clock out times are used to make calculations in payroll such as lateness, overtime, work duration and so on. Integration with time attendance devices enables payroll software to automate payroll processing with reference to attendance data.

When you have your workforce in different countries, it becomes mandatory for you to process and pay out payroll in multiple currencies. The payroll software should also facilitate currency conversion and generate reports for each currency. The software should also allow you to process all currencies from your centralized office.

Ability to customize your payslips enables you to fill the payslips with information your employees would appreciate. The payroll software should allow you to display additional information on overtime, lateness, leaves, leave balances and so on.

You may have offered additional facilities to the benefit of your employees which should also be considered while processing payroll. A loan issued to an employee should be recovered in instalments, the salary paid in advance should reflect in the payslip, and so on. To accommodate these your payroll software should also have additional features like Loans & Advance Management, Bonus, Gratuity, Arrears, Welfare Fund, and so on.

When an employee leaves, you should compensate him according to the years of service, unused leave balances, assets he is holding, bonus, ex-gratia and so on. So, the final settlement has more than just monthly payroll, and it helps if the payroll software has a dedicated full and final settlement option to calculate all aspects of an employee leaving.

When payroll is on cloud you don’t have to worry about maintaining servers and other Information technology related issues. Also, you don’t have to purchase expensive computer hardware or employ IT engineers. But, some companies prefer to keep the data on-premise due to security concerns. Some payroll software allow you to move from ‘Cloud’ to ‘On-premise’ and vice versa.

When you switch over to a new payroll system, you will have to migrate the old data. Make sure the new payroll software allows this.

Every company is unique. You may have to implement specific checks or calculations in your payroll processing to ensure completely automated processing while taking care of all your company rules. This requires that your payroll software vendor allows at least minor additions to the software to accommodate your requirement.

The payslip of an employee is generated based on his work duration, lateness, overtime, leaves and so on. The software should be capable of calculating all these with at most accuracy. Even when there are a large number of employees, the software should be able to process payroll to be released to employees on time.

It should be possible to define the attendance, leave, payroll rules up front so that the payroll is processed with reference to the rules specified. You may not be able to start processing payroll until the payroll period is over and then you usually have very little time to release the payroll to your employees and the software should be able to process payroll in such limited time.

Many companies still use Microsoft excel to process payroll; but this has many limitations. In excel, every cell can have a formulae and it is easy to make a mistake if you edit formulae for each employee. A payroll software should be designed in such a way that it is less prone to such errors.

Payroll is usually processed based on attendance, leave, overtime data. The software should automate the collection of these data as much as possible to minimise manual intervention. Time Attendance devices are used to collect attendance data. Employee Self Service module is used to collect leave data. The payroll software should be able to communicate with these modules to capture data automatically without any manual intervention.