Has the time come to change up your payroll software? For many, it's a time of trepidation. After all, it's a significant investment, and your people and business are counting on you getting it right. Sadly, making a poor buying decision has the potential to circle round and bite you in the butt every month!

We'd like to see you sitting pretty with a new solution. So, here are the five things we suggest you take into consideration when choosing your new payroll application.

1. Is it legislation ready?

While New Zealand and Australia have many similarities in the payroll space, we also have some quite specific differences. Namely, legislative requirements.

The software you choose must be compliant for your country (and we suggest you make this a non-negotiable). While it sounds obvious, there have been instances where international payroll companies have entered and sold into the New Zealand market without being able to provide their customers with the ability to comply with the Holidays Act. And these vendors have also struggled to understand and meet the complex award structure in Australia. Oops.

2. Is it easy to use, develop and support?

Payroll systems are known for their complexity. So, ease of use and support are critical factors to consider when making a purchasing decision.

No-one loves a system that's difficult to use and comes with a big learning curve. It presents a significant roadblock to user adoption and limits the number of people with the capability to provide permanent or temporary coverage. Which means if you are the payroll manager, you can never be sick or take leave.

When you choose a locally developed solution, you have more direct access to support in your business hours, and you know that it's been developed by people who understand your ATO and IRD requirements, and are aware of upcoming legislative changes.

And you know there is a user-network or user-group you can turn to for help, hints, and tips as well.

3. How does the vendor check out?

Not all vendors are created equal. Great branding and sales techniques will never make up for lack of responsiveness when you are at the coal face, people are clamouring to be paid, and you need help!

Don't get caught out. Invest time and effort into some stringent reference checking. Get first-hand feedback from other local customers on their relationship with the vendor. Have they been let down? How have problems been handled and resolved? Are they there when needed? Have there been unexpected costs?

4. Are you prepared to invest time and money?

Let's talk about time first. Depending on its size and complexity, a payroll project can take from 3-6 months to implement. So, it requires commitment from stakeholders to the users for a considerable time.

And money. With payroll software, you get what you pay for. What seems like great value at the time of purchase can turn into a rigid and expensive-to-develop application later on.

So, ask some questions to establish exactly what you're getting.

Find out how much you can manage yourselves. Can you set up new allowances and deductions as and when needed, or do you have to go back to the vendor for every little thing? Does the system provide self-service where staff can apply for, cancel, or change their leave? (And if it doesn't, then back away!). How do you get payslips out, how is annual leave managed? Can you configure annual leave as many times as you want, or are there limits? Does it have useful reporting tools, are there organisational workflows for authorising and finalising pays? Is there a process for STP and is payday filing automated? And can you integrate it, does the system allow APIs or web services?

5. Embracing cloud and the winds of change

Don't settle for anything less than a cloud-based payroll system. If it wasn't a big deal to your business before, we're betting that the Covid-19 lockdown hammered this point home.

You must be able to securely access your payroll from wherever you are. Even in the case of fire, earthquake or pandemic, payroll makes the world go around.

It's also important to keep an eye on the future of payroll as well. What innovations are there in payroll? How do you choose a system that will do the job now and ten years down the track? The rate of change in the world of technology is rapid, and most modern software solutions – including payroll – are evolving quickly. Will the system you buy now still rely on payroll batch driven processes which can:

Limit you in terms of your frequency of pays,
Increase the complexity or difficulty to do manual pays,
Challenge your ability to have multiple pay frequencies.

We know your butt is on the line when it comes to reviewing, shortlisting, and recommending the best possible payroll solution to the business. But like anything, the more you know, the better equipped you are to end up sitting pretty.