Home Business What to Pay Attention to in Your HR and Payroll Software as...

What to Pay Attention to in Your HR and Payroll Software as a Small Business

HR and payroll software

You’ve realized how important HR and payroll software could be for your business. However, you are not sure of what to look for and how the solution could have an overall positive impact on your small business.

Not to worry – we have come up with a list of the features to look for when choosing the best HR and payroll software.

Do I Need HR and Payroll Software?

You need the software if your small business wants to add some automation to the employee recruitment and payment process. Otherwise, going for a single solution (payroll software) could be a better option.

We highly recommend getting software that infuses the two because of the following benefits:

  • It monitors or tracks employees’ attendance at work.
  • The software also helps in tracking the sick time and vacation accruals of your staff.
  • It is also helpful in the automation of paychecks and taxes.

A Guide to Choosing the Best HR and Payroll Software for Small Business

The key to unifying your human resource and finance departments in a single solution starts with the selection of the right software.

In this section, we take you on a tour of the different factors to consider when choosing HR and payroll software.

1. Decide on the Type of Software Solution

Since the Human Resource (HR) and finance departments are two separate parts; unifying them comes with some compromises.

Thus, the choice of HR and payroll software should be based on the type of solution it offers. While the Cloud HR software variant covers a cloud-based computation of the HR processes; the Full-Service HR and payroll software can combine both the HR and finance aspects of your business in one platform.

2. Integration Capabilities

The software is designed to ease the workloads off your employees. To do this successfully, it needs to unify with other platforms and existing solutions.

It is for this reason that the selection of HR and payroll software with integration capabilities is a must. The following are some of the benefits of the integration capability feature of every good HR and payroll software:

  • It integrates or gets easily added to enterprise systems and third-party applications/solutions.
  • The integrated solution allows for the management of different facets of your small business from one platform.

3. Payroll Management

Every aspect of your employees’ payments should be automated with the aid of HR and payroll software.

The following are some of the benefits of this feature:

  • It automates the basic payroll functions, including recordkeeping and wage deduction.
  • You can also count on it to evaluate vacation accruals and wages.
  • Some HR and payroll software can be customized or modified to make changes to certain payroll information.

4. The Best HR & Payroll Software Manages Tax

Depending on the size of your small business and the tax options; the payroll software can help with the automation.

Some of these HR and payroll tools are capable of:

  • Handling the Workers’ Compensation.
  • Managing the tax filings and;
  • Sending reminders of the next tax filing dates.

5. Report Generation and Printing

The ideal HR and payroll software should handle the generation of reports and the printing of the same. This goes a long way in streamlining the process of managing the salary statements, leave summaries and calculating the salary benefits for the employees.

You can also use it for printing relevant payroll forms, such as Form 16, Form 12C and Form 12BA.

6. Direct-to-Bank Deposit

Some employees prefer paycheck payments and due to the scale of your business; this could breed a lot of expenses. From annual processing fees to the back-to-forth process of going to the bank; your small business will incur a lot of expenses in the process.

Using in-house payroll software for small businesses helps in the following ways:

  • It helps to automate the direct-to-bank deposit of employees’ paychecks.
  • The payroll software can also handle the generation of virtual payslips for such transactions.

Note: Extra security measures should be in place to ensure the smooth running of this process. To this end, you may want to instruct someone (preferably the HR manager), to manually vet the payslips before the deposits are made.


7. Improved Security

It will be a hit-and-miss if the HR attendance and payroll software handles the employee management and payments, yet it fails to secure the entire process.

The following are examples of some of the security features to look for in the software before investing in it:

Employee Access

Each of your staff should be able to have access to the backend of their profile. This makes the management of their information easier.

Content Restriction

You can also go for the HR and payroll software that restricts certain information. For example, high-valued resources like the payroll information, tax files and employee personal details can be restricted to a certain degree.

Software Encryption

In addition to assigning only a few persons access to the software; you also want to use the encryption function.

This high-level security measure helps to prevent unwarranted access to the data and pieces of information stored in the software.

Software Compatibility

Is the HR and payroll software compatible with the type of business you do? The following are pointers to determining the compatibility:

  • Is the software ideal for the size (number of employees and other staff) of your business?
  • Does the HR and payroll software provide as many of the features you need to automate your small business dealings?
  • Find out if the solution is within your budget.

8. Is the HR and Payroll Software Customizable?

You will not continue running a “small business” in many years to come. If you have plans to scale (which you should); the choice of software should be future-centric.

The software’s customization option allows you to add or enable new features as your small business expands, in leaps and bounds.

The customization options range from:

  • Customization of the fields and screens.
  • The software can also be customized to produce custom-tailored paychecks and invoices.


Your small business can achieve a lot and streamline the payments to contracts, the employees and governmental agencies with the payroll software. One other feature to look for is the availability of customer support. This comes in handy when you need to access insider information, want to troubleshoot a problem or have some complaints to make.

Previous articleWhat Makes an Excellent Property Manager? 10 Qualities to Look For
Next article5 Best Simple Payroll Solution Providers for Small Businesses
CHUKWUKADIBIA ABAH is a passionate freelance writer and contributor to the Entrepreneur Business Blog. You can follow him on: Facebook: https://web.facebook.com/ChukwukadibiaAbah1/ Twitter: https://twitter.com/Chukwukadibia01 LinkedIn: https://www.linkedin.com/in/chukwukadibiaabah/ Instagram: https://instagram.com/chukwukadibia_abah


Please enter your comment!
Please enter your name here