Payroll Migration – A Step-by-Step Guide

June 7, 2019

Payroll traditionally referred to the total amount to be paid to workers or employees during a specific time period. Today the definition includes the list of employees to be paid within a specific time period, the amount to be paid to those employees and other details pertaining to the employee including their designation, department, salaries, bonuses, incentives, and leaves. Managing the payment of wages within an organization to its employees is called Payroll Processing.

Traditionally, organizations handled the Payroll in-house. As time went by, it became a tedious process and organizations began to outsource their payroll management to an accountant and with the rise of technology, shifting it to Payroll software or Payroll management systems such as Day force and on pay.

Payroll Migration refers to the process of shifting from one payroll platform or software to another payroll platform or software. This may be due to an existing inefficient system that brings down productivity and may be responsible for employees not getting their pay on time or may help in reducing overheads, which may benefit smaller organizations and start-ups.

In some cases, organizations may be unable to migrate their Payroll on their own. In such instances, Payroll migration services are used. In some cases, companies may want to outsource Their Payroll entirely. For this purpose, Payroll vendors are used. These payroll vendors use Payroll Management Systems, enables organizations to effectively manage their Payroll. The migration process is usually carried out at the end of a financial quarter or a financial year, depending on the workload of the organization.

The process of Payroll Migration consists of 4 major steps:

Step 1: Management ensures that all the payroll data is accounted for and entirely up to date. Given the complexity and size of the organization, the management must account for all the employee details and see that the data is comprehensive and consistent.

Step 2: The second step consists of the organization and the vendor lifting the data, which includes the current Payroll and the existing Employee Resource Planning format from the existing system and storing it elsewhere. Most Payroll services prefer to use cloud-based methods. In some cases, Payroll Vendors can upgrade the software and protocols if they are outdated or leave the data in the existing format.

Step 3: The accuracy of the transformed data is now re-validated by the organization, and the new platform is beta-tested by experts as well as select employees to gauge employee reactions and get feedback. Once the software is tested and has been approved by management, the payroll system can now be used by the employees.

Step 4: Once it is open to the organization to use, training sessions are held so that employees can better orient themselves to the new platform and use it more effectively.

Payroll migration to other vendors with cloud-based platforms and Payroll has many benefits for organizations. To begin with, there is lesser pressure on the organization to oversee Payroll for all its employees. The onus lies completely on the vendor. These vendors and software offer easier access to employees with accurate, well-maintained reports and data. Another advantage for organizations to consider is that the software can be easily scaled or rather, there is a tremendous potential for growth. More importantly, data security is assured as cloud-based systems always have back-ups and are not prone to crashes of the payroll system, which would see a tremendous loss of data. This would dampen the progress and effectivity of the organization. Therefore, it falls to the organization to decide about their Payroll Processing and Payroll management systems and whether they would like for them to remain within the organization or whether outsourcing is a more effective way forward.

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