The orthodox wisdom – and often the matching sermon – is that business looks to computer applications for efficiency, return on investment and better use of that scarce commodity, people’s time. All of this is true about payroll software, but blind panic or sheer bewilderment when confronted with the requirements of the Revenue are probably closer to the motivational mark in real business life. Certainly all of the vendors of payroll software report increased sign-ups last year with the arrival of the new credit-based system for personal income tax. They are also quietly rubbing their hands again in anticipation of the proposed extension of Benefit in Kind coverage in the next tax year and the further stimulus it will give their market.
Another factor that is anecdotally driving small business to computerised payroll systems is the increasing incidence of casual, part-time and seasonal employees. Almost every business needs to be flexible in its employment practices; dealing with mixed types of employment – and payment by shift, day, week, fortnight or month – introduces complications that would rightly frighten all but the most battle-hardened, old-school Wages Clerk. There are not too many of those still around and they don’t come cheap. But amazingly, payroll software does. A company with under ten employees would not need to spend more than about EUR100 a year. In fact the maximum we could find in a small survey would be about EUR30 per employee per year and the best, for those that qualify, is free! Buttons, basically.
Essential administration
So if your business is not already using payroll software you are certainly wasting your own or someone else’s time, costing the business too much for this essential administrative chore, and missing an opportunity to give yourself a little more peace of mind – in one area at least. The time of year is perfect (unless you want to be really mean about the modest costs for the remainder of the tax year), because you will have a few payroll runs of practice before the new 2004 regime clicks into place. Several of the payroll software vendors offer a free month’s trial so it wouldn’t be too much of an exercise to pick a few that seem suitable and test them in parallel just to get a quick feel for their style of working and features.
If you are already using payroll, it is worth noting that experienced users with more than a handful of staff may find that moving up to a more sophisticated package would add useful functions. Human resources records and management (attendance and sick leave, timekeeping, etc.) are the most common extension of basic payroll functions but perhaps you wish to move on to direct credit payment to your employee’s bank accounts, for example, or online dealing with the Revenue Online Service (www.ros.ie). Some packages do not provide for these, some do them better than others. It is well worth looking at in more detail.
The one thing that all Irish payroll packages do will possibly be the most important single benefit to many new users – they know the Revenue rules and they apply them accurately when fed the right information. All of the vendors go to great pains annually to get their revisions and upgrades right; there have been minimal complaints over the years. However, the Revenue does not endorse or approve any specific packages. Instead, for some years it has offered a test section of its Web site to software developers so that they can simulate everything before finalising the package for general users.
Potential purchases
Your options as a potential purchaser are very wide, ranging from the products of a leading accounts software multinational, such as Sage, to some enterprising small Irish software developers. The market is generally led by products from the companies that also produce the most widely used accounts software: QuickPay and MicroPay from Sage and EasyPay from Take Five, although payroll specialist Thesaurus has by far the largest number of users at over 23,000 employers. There are other specialists like Intelligo, Collsoft and Quantum. Quantum acquired Computer Resources, original developer of the QuickPay and MicroPay solutions later sold to Sage, and has now launched a newly developed payroll product. Since integration with your accounts software is important, it is only natural that companies should look first to the companion products where available. That means QuickPay, EasyPay, Big Red Book’s own payroll, HRpay for Aquila Artemis II, Quantum for Pegasus users and so on. There are others, but our constraint here is that we are interested in payroll products for companies that are smart – but small! It should also be noted that import/export of summary data from payroll to accounts is in general very simple. Many users (and their accountants) are perfectly happy to take the totals from payroll each month and manually enter them into the accounts.
Essential Features
All of the payroll systems on offer can handle the different types of employment and their related payment periods – casual, part-time, permanent and payment monthly/weekly/occasional by cash or cheque. They will produce pay slips for the employee showing exactly what has been deducted and the cumulative reports as required for employees and the Revenue, e.g. P45, P60 and P30, P35, etc. There are also additional pay elements such as bonuses, commission or profit share that are occasional and involve recalculation of people’s tax and other liabilities. If you have anything more unusual, there will always be a way of accounting for it but you may wish to check if there is a specific package that has a built-in capability.
Payments: The basic packages do the calculations and keep the records. Someone then has to make up the cash wages packets or write/sign the cheques. The next step up is of course online transactions and most packages offer PayPath credit transfers and ROS capability.
Deductions: All systems will calculate the appropriate mandatory deductions, PAYE, PRSI and Personal Retirement Savings Accounts (PRSAs), and keep the records as well as compiling the annual returns. Note that PRSA deductions are now mandatory for all employers – even those with just a single employee. But employees often rely on the company also to look after voluntary deductions and onward payment. Mortgage/loan repayments and VHI are the most common, but others range from payments to family (e.g. a separated spouse) to ‘split net pay’ (different bank accounts), and in fact anything the company is willing to look after. Some packages offer much more flexibility in voluntary deductions, so check out if it might apply. Similarly, if voluntary deductions are anyway prevalent in your business then online payment capability is probably a must to ease the admin burden.
Multi-company: Many businesses, however small, run more than one company for practical or technical reasons. Even if you do not, a nominally separate company in the accounts system offers a simple solution to the problem of doing the remuneration and tax for owner proprietors, directors or senior staff while keeping the details as confidential as possible. All packages offer easy and instant upgrades for more companies.
Support: All of the payroll vendors offer generous telephone support with minimal restriction or quotas. This may be included in the initial purchase price or be part of an annual charge that includes system upgrading as required. In many respects, payroll is now a cross between a product and a service, since it has to be changed every year to comply with changing tax and social insurance rules. Some vendors are pricing it that way as a once-off annual charge.
The HR Element: Even the smallest business has to keep personnel records of timekeeping and attendance, overtime, holidays and sick leave. All payroll packages allow these basic elements to be entered and accounted for when calculating payments. They will all record cumulative totals at least for the current tax year. After that, some have more features than others, up to what is virtually a Human Resources module. At the least, the ability to keep a confidential record of an employee’s entire service history would be useful to most owners/managers.
Irish Payroll Software Directory
Aquila HRpay: Launched by Galway-based Aquila in August, now 70 users. EUR75 for 5 employees, EUR150 for 20, EUR325 for 100. Annual EUR75 all versions. Free trial CD. www.aquilatechnology.com
Big Red Book Payroll: Bought and upgraded by BRB in 200 for its 2001 launch, now over 1,000 users. EUR90 unlimited employees, one company. Extra 5 companies EUR50. Free phone support. Annual EUR90. www.bigredbook.com
Collsoft Payroll 2003: Over 1,000 users since 2001. EUR100 unlimited employees, 3 companies. Unlimited companies EUR250. Annual same. Free trial. www.collsoft.ie
Intelligo VIP: Launched 1996, over 250 users. Free phone support. Free trial. www.intelligo.ie
Quantum Payroll: Newly developed 2003, 250 users. EUR395 35 employees, 3 companies (discounts for competitive upgrades) annual EUR100, EUR695 100 employees, EUR165 annual. Extra companies EUR80. www.qbs.ie
Thesaurus Payroll Manager: Since 1992 and now 23,608 employers. EUR120 and annually unlimited employees. Extra companies EUR60. Bureau version unlimited companies EUR275. www.itco.ie
Sage QuickPay: 5,000 users since 1984, bought by Sage 2000. Single company, 3 employees FREE DOWNLOAD annually. Single co.10 employees EUR95 annual, 30 employees EUR250. SageCover phone support EUR113, EUR230, etc. Same annual. www.sage.ie
Take Five EasyPay: 2,500 users after 20 years. EUR90 single company, 9 employees, EUR90 annual. 100 employees EUR190. Modular approach to extras. www.takefive.ie
This directory and the summary information it contains are for general guidance of readers, especially owners and managers in smaller Irish businesses, and do not purport to be comprehensive. Consult Web sites given or the vendors and their agents directly.
08/12/03
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