When implementing a new payroll system in your company, there are a few things to remember. If the new system isn’t well-organized and planned, it can lead to mismanagement of salaries and taxes. In this article, we will look at 12 easy steps for implementing a new payroll system.

1. HOW TO IMPLEMENT A NEW PAYROLL
SYSTEM IN EASY STEPS
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When implementing a new payroll system in your company, there are a few things to remember.
If the new system isn’t well-organized and planned, it can lead to mismanagement of salaries
and taxes. In this article, we will look at 12 easy steps for implementing a new payroll system.
Understanding the System
Whenever you are implementing a new payroll system, it is important to understand it
thoroughly. The team that is going to handle the system must know how it works. The new
system will be different from the one you are currently using. Hence, having complete
knowledge about its working is important.
Integrating Software
When moving to a new payroll system, you need understand if it can integrate all your HR,
accounting and ledger software. An ideal payroll software should have this function, whether
in-built or as an add-on. It should be able to collate reports, and prevent duplicate entries and
unwanted paperwork.
System Size and Requirements
If you are running a small business, the payroll system will be smaller in size. As your
employees grow, so will the size of the system. Small businesses or startups sometimes
graduate to a computer-based payroll system as the organization grows. When implementing a
new payroll system, you should consider whether its scope suits your requirements.
Evaluation Team
The evaluation team comprises of employees who are stakeholders in the payroll processes.
This is the team that helps you make decisions when selecting a new payroll software. The
reason you should have a team of stakeholders is because they are going to fund the new
system. Hence, it’s best to have them on board throughout the decision-making process.
Timing
Whether implementing a new payroll system or transitioning from your old one, timing is very
important. Implementing a new payroll system at the start of a new financial year or quarter

2. makes integrating accounts and data easier. Like starting with a clean slate. It is also easier to
transfer data to the new software.
Data Transfer
Does the new system allow for automated transfer of all data from your old system? Do you
need to manually enter everything or can the data be imported? Again, checking that the data
entered is equally important. The new system should be able to do all that.
Parallel Processing
To ensure that the new system is working well, you can run it alongside your existing system for
a while. This will pop up any glitches or data that may have been missed/duplicated. Since you
are familiar with your existing payroll system, you will know what to expect. This will make it
easier to conclude whether the new system is working efficiently.
Additional Hardware
Implementing a new payroll system can be an added expense. Talk to your IT team and
understand whether the current hardware is compatible with the new system. If it isn’t, then you
may need to purchase new one for the new system. Is this an expense that you are ready for? If
not, you may need to rethink your choice of software.
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Set Payment Methods
Setting up flexible payment methods that give your employees gives them multiple options for
receiving their money. For instance, some people prefer bank transfers while others prefer
payroll cards or cheques. This gives them the chance to manage their finances better. Does
your new payroll system offer this flexibility?
Vendor Track Record
There is no room for error when it comes to your employees’ paychecks. Hence, when selecting
a new payroll system to implement, the vendor must be chosen wisely. Go with someone who
has a proven, positive track record. There’s nothing wrong with going for a new vendor provided
you have faith in his services. However, for a process like payroll, it’s best to play it safe. The
vendor must be credible, reliable, established, and have a positive market presence. He should
follow through on post-sales service terms.
Customer Support
This adds to the credibility of the vendor from whom you purchase the new payroll management
system software. Does he offer comprehensive customer support? If you are located in a
different time zone, does he have a support team that will be available to assist you during your
working hours? Are they qualified to be providing such assistance? What is the average
response time after you raise a query? Does the vendor have both telephone and online
support? It is very important to ask these questions beforehand.
References
And the final step in choosing the right vendor - references. Obtain information about the vendor
and his services from existing clients. Many a time, vendors provide these references
themselves. But it is still prudent to do some independent enquiry. Talk to companies that are in
different time zones or those that require constant customer support. These are the references
that will count the most.