Questions to ask a payroll and time vendor

The statutory floor

The clearest right answers on the site, and all of it can be shown on their demo payroll. Anything here that gets a hesitant answer should end the conversation.

1. Are you recognised by HMRC, and show me a full payment submission going out of your demo environment.

   Filing on or before payday is the duty and late filing brings automatic penalties. Watch a submission happen rather than being told it does.

   Worry ifReal time information filing that has to be triggered by hand every run.

2. Show me auto-enrolment on your demo data: assessing the workforce this period, an opt-in, an opt-out, and the statutory letters going out.

   Assessment happens every pay period, with opt-ins, opt-outs and required communications, and The Pensions Regulator enforces it with penalties that escalate. It is the fiddliest ongoing duty in payroll and the one most often half-built.

   IRIS, employer guide to pension auto-enrolment

3. Somebody in your demo data was paid wrong two months ago. Show me the correction, and what the payslip and year-to-date figures look like afterwards.

   Retrospective corrections are most of what is genuinely hard about running a payroll, and they work perfectly well on invented data. This one demo tells you whether the product was built by people who have done the job.

4. Are statutory sick, maternity, paternity and shared parental pay calculated by the system, or worked out by us?

   Either answer is survivable. Not knowing which one you have bought is not.

5. Walk me through a payroll year end.

   It happens once a year, it is the most stressful week your payroll person has, and it is never in the demo. Ask what is automatic and what is a checklist somebody works through at half past six.

6. An employee thinks their payslip is wrong. What can they see themselves before they email us?

   Payslip queries are the highest-volume thing a payroll team handles. A clear payslip and a history the employee can reach cuts that more than any feature on the slide.

7. Show me the approval step before a run goes out, and what a second pair of eyes actually sees.

   The last checkpoint before money moves. Ask what the reviewer is shown, whether it highlights what changed since last month, and whether the run can be released without them.

   Worry ifA single button with no comparison against the previous period.

The two questions that get honest answers

Ask these at the end, when the demo is over and the room has relaxed. They are worth more than the previous hour.

1. Which of the things you showed me today are live for every customer, and which are on the roadmap?

   The most common complaint from buyers in this market is feeling misled afterwards, with promised features never arriving. Ask in the room, write the answer down, and put anything you are depending on into the contract with a date against it.

   Worry ifAnything demonstrated in an environment no customer is on yet.

2. What are the three things your customers complain about most?

   A good salesperson answers honestly, because they know you will find out in month two. "Nothing really" means either they do not talk to their customers or they will not tell you.

   Worry ifA strength dressed up as a weakness.

Drive it yourself

Providers in this category are more reluctant than most to hand over a sandbox. Ask anyway, because the two things below are the ones that predict how the implementation will go.

1. Give us a test company and let us run one period ourselves: twenty made-up employees including a starter, a leaver, and somebody on statutory maternity pay.

   Running it yourself once tells you how much payroll knowledge the product assumes you have. If your payroll person cannot get through a period without help, neither will they in March.

2. Import our employee data in your template, with invented names, and show us what failed.

   The import is where payroll migrations stall. Doing it with fake data tells you how clean your real file needs to be, and how much of the cleaning is yours.

Getting a sandbox at all

1. Can we have a sandbox for two weeks with our own test data, without a sales process attached?

   Everything you learn in a demo is about their product being used the way they use it. A fortnight with your own made-up data tells you whether your team can use it. A vendor confident in the product hands one over.

   Worry ifA trial only available after a commercial conversation, or a guided tour rather than an account.

2. Set up one thing we would need on day one, ourselves, while you watch.

   Pick something ordinary: a workflow step, an approval, a template. If it needs the vendor, then every change for the next three years needs the vendor, and nobody put that in the quote.

   Worry ifConfiguration that turns out to be a professional services ticket.

Ask a customer

1. What happened the last time a submission failed close to payday?

   The vendor will describe an escalation path. A customer will tell you whether anybody picked up the phone.

2. How did the parallel run go, and how many cycles did it take to match?

   Running the new payroll alongside the old one and reconciling to the penny is how this is done safely. The number of cycles it took is the honest measure of how hard the switch was.

3. How long does your payroll take now, in hours, compared with your old system?

   The only measure that matters, and the only person who has it is somebody who ran both. Ask for the number rather than an impression.

4. What still happens in a spreadsheet?

   There is always something. Which thing, and why it never moved in, is the most honest description of the product you will get.

Worth asking any customer, in any category

Ask the vendor for two customers your size, then ask each for a screen share. These four are for that call, with the vendor not on the line.

1. How long did implementation actually take, against what you were told?

   The most useful number in the whole process, and the vendor will quote you their fastest. A customer will tell you what it cost in their own team's time, which never appears in any quote.

2. What did you assume it did that it turned out not to do?

   Everybody has one. It is usually a reporting gap or an integration that needed building, and it is the thing you would otherwise find in month three.

3. What happened the last time you raised something serious with support?

   Support quality tends to drop once a contract is signed, and a reference customer is a year past that point. Ask for a specific incident rather than an opinion.

What you are actually buying

1. Is this software we run, or a service where you run the payroll? Who presses the button?

   The word payroll covers both and they are completely different purchases with different failure modes. Get it stated plainly, and get the division of responsibility into the contract.

2. Can we run a parallel payroll against our current provider before going live, and is it charged?

   Running both for a cycle or two and reconciling is the normal way to switch payroll safely. A provider who has done it before expects the question and has a process.

   Worry ifReluctance, or a charge for it.

3. Name every extra: time and attendance, expenses, the employee app, off-cycle pay runs, P11Ds.

   Additional and off-cycle pay runs charged per run is common, and it catches people out the first time somebody leaves mid-month.

4. What is your support cover on payday, in hours, and what is the escalation path?

   Ask for it as a document rather than a reassurance. What you are buying is what happens on the worst day, not the normal one.

   Worry ifA support portal with a next-business-day response target.

5. If a payroll error is yours rather than ours, what happens? Put the answer in the contract.

   Late filing penalties, pension contribution corrections and the cost of an emergency payment all land somewhere. Most standard terms put them on you. It is worth one conversation to find out.

6. Who at your end knows our payroll, and what happens when they leave?

   In a managed service you are buying a person as much as a product. Ask whether you get a named contact, a pooled team, or a ticket queue.

What it costs, all in

Implementation, migration, integrations and support tiers are where the quoted price stops being the price. Ask for the total before the demo ends.

1. What does year one cost in total, in writing, including implementation, migration and integration fees?

   The licence figure is rarely the bill. Implementation, data migration, API charges, premium support and mid-term true-ups are all common and all appear after signature. A vendor who will put the year-one total in an email can be held to it.

   Worry ifA licence price now and implementation "scoped later".

2. Is implementation a fixed fee or time and materials?

   Fixed fee puts the risk of a slow implementation on the people running it. Time and materials puts it on you, and HR data is always messier than anyone expects.

   Worry ifDay rates with no cap.

3. What is the renewal price, and is the increase capped in the contract?

   Year-one discounts often disappear at renewal, which turns a good deal into an expensive one two years in. A cap written into the contract is a normal thing to ask for.

   Worry ifUplift "in line with the market".

4. What notice do we give to leave, and does it renew automatically?

   Thirty to sixty days is reasonable. Ninety or more with auto-renewal means one missed diary entry costs another full year. Ask for the clause and read it in the room.

   Worry ifNinety days or more, auto-renewing, multi-year.

5. On the day we leave, what do we get, in what format, and at what cost? Is that in the contract?

   You want every record you put in, plus anything the system generated about your people, in CSV or JSON, at no charge. A feature can change in a release note. A clause cannot, and this one costs nothing to ask for at the point of buying.

   Worry ifA PDF export, a fee, or access cut off before the export arrives.

Data protection and security

1. For each thing this system does, are you controller or processor, and is the data processing agreement attached to the contract?

   The roles have to be settled activity by activity rather than once for the whole product, and the ICO expects a contract that says so. If they are a processor you have to give explicit written instructions, so ask what those will say.

   Worry ifHesitation, or "we are the processor" as a blanket answer.

   ICO, six questions to ask when procuring AI recruitment tools, November 2024

2. Where is the data hosted, which sub-processors touch it, and how do we hear when that list changes?

   Employee data includes salaries, health information and grievances. You need to know who holds it and to have a route to object when a new sub-processor appears.

3. Do you train any model on our data? Is it off by default, and is that in the contract?

   Ask plainly and get it in writing. "We do not sell your data" is a different sentence and is often the one that comes back.

   Worry ifAn answer about anonymisation that never says no.

4. Send us your most recent penetration test summary and your ISO 27001 certificate or SOC 2 report.

   A certificate number is easy to claim and easy to check. The pen test summary tells you whether anything serious was found and how fast it closed.

   Worry if"Available under NDA once we have progressed further."

5. When an employee makes a subject access request touching your system, what do we get from you and how quickly?

   You have a statutory deadline and the vendor does not. Ask for their internal service level in days and check it leaves you time to review before you answer.