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November 6th, 2015

What to Ask Yourself Before Writing That Payroll RFP

Now that you’ve decided to upgrade or implement new payroll software, how do you decide what you need in the solution? Or course, you must review your company’s requirements and what would you absolutely need and what would be nice, but could live without.

Man Sitting Working on His Laptop with Four Other People

While much of your focus should be on determining the technical functionality requirements, there are many other important things to be considered as well. Considerations such as a software provider partner with a strong track record and the right tools to support you in your transition, or the ability to maintain compliance with your taxation obligations.

In this post, we’ll cover some issues to consider when creating your RFP that go beyond just the feature-specific items.

Link to Time Capture

Capturing time is one of the most error-prone aspects of payroll. Especially if you have hourly employees who are reliant on these records to be paid correctly, which makes exporting time records to payroll and processing them correctly and accurately essential to your ongoing pay process.

The best way to reduce the possibility of time-related errors is to have an integrated time and attendance and payroll system. With most integrated systems, time and earning records share the same coding scheme and are automatically transferred from time and attendance to payroll for processing. This integration also increases efficiency as the time needed for transferal is reduced.

However, if you are not ready to move to an automated time and attendance system yet, there are other solutions that can accommodate and work in conjunction with offline systems such as timesheets, biometric scanners, and other third party solutions. Keep in mind that planning should take into account future growth. A system that can handle your current and intended time to payroll processes as well is the goal.

It’s important to find out…

  • The different ways that the software can accept time records (spreadsheet, third party, etc)
  • If the solution has time and attendance and payroll integrated, and if not, what interfaces or integrations does the system support

Statutory reporting

Flags for Various CountriesStatutory reporting is a vital component of being an employer, so you need a payroll system that can generate the statutory forms needed to stay compliant with your governing tax body. To avoid filling these forms out manually, it’s a good idea to consider how easily your payroll system can generate statutory reports and how complete it is in terms of meeting your statutory requirements and accidentally putting in the wrong information. If the software is accredited, it should already have the statutory forms you need. Most governmental tax authorities also allow online submission of tax information, so you may also want to consider how your electronic payroll system generates the file for uploading. Some payroll solutions can even submit the forms directly to the proper governing body without having to exit the application.

It’s important to find out…

  • Which statutory reports are handled
  • How the online submission file is created and how it is to be submitted to the governing body

Calculation Management

Calculations are a huge part of payroll, not only for calculating gross-to-net, but also for maintaining all the calculations for benefits, taxes, loans, allowances, entitlements such as sick and vacation leave, and more. The more complicated your payroll, the more calculations you have to manage. With so many to manage, it’s critical that the process to manage them is clear and simple for your payroll team to maintain. This is especially true when there are last minute changes that need to be made quickly or mass updates at the end of the tax year.

It’s important to find out…

  • How calculations are maintained in the payroll software and which are supported
  • If you can create your own custom calculations
  • How updates to statutory calculations are managed

If calculations are maintained by the software provider, it’s important to find out…

  • Which calculations are managed and which are not
  • When and how often updates for calculations are provided for the software

At LOKI Systems, we recognize that calculation management is essential to accurate and functional payroll, which is why our calculations are macro-based. Calculation strings are created similar to Microsoft Excel and are in the form of data, rather than code. This means they are easy to create, edit and manage without needing a software developer or IT help.

Man Using Calculator on Spreadsheets

Audit and Recordkeeping Capabilities

The best way to manage compliance and maintain accuracy in payroll is to have a record of all actions taken. If errors occur, proper recordkeeping help you see where things went wrong, when, and who was involved. On the other hand, having a record trail can also be way to help you disprove accusations of wrongdoing as well.

Good software solutions keep an audit log of all users who change key data fields and when they changed them, as well as keep a log of historical changes made to sensitive data, such as salary or employee personal information. Some can even keep a complete record of all pay statements issued.

It’s important to find out…

  • What functions, processes and data field types are audited and logged
  • How clear it is to read audit information and the ease of accessing it

 

Lastly when talking to vendors, keep an open mind. There won’t be a silver bullet solution that meets all your needs exactly straight out of the box. You’ll most likely find a solution that meets most of your requirements, but may have some gaps in specific areas that may require additional configuration or customization to fit. Also be aware that some of those additional options may not be available in the market or at your price point. Make sure you know what you want in the vendor, technical features, support and processes but also on which items you may be able to compromise on.

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