Managing payroll within a business is complex because it goes beyond paying salaries. Payroll also includes managing benefits, pensions, and taxes to maintain legal and regulatory compliance. Payroll software reduces this complexity by automating processes that would otherwise consume significant time and resources.
Bacs payroll software removes friction and administrative burdens by delivering timely and accurate workforce payments. It minimises errors and creates efficiencies, ensuring payroll runs smoothly and reliably.
SMEs, Bureaus, and Enterprises across the UK manage multiple workstreams, and a streamlined payroll system can transform efficiency. With 30.3 million employees on UK payroll in March 2025, automation makes sense. Payroll software scales with business size, ensuring accurate payments whether you employ dozens or thousands of staff.
According to the latest statistics, nearly two thirds of British businesses outsource payroll to a bureau or software provider. This shows that payroll software provides widespread value by combining accuracy, compliance, and time savings. In this article, we explore exactly what Bacs payroll software is and examine the benefits it delivers to businesses of every size.
Contents
- What is payroll software?
- How does payroll software work?
- 5 payroll software business benefits.
- Discover efficient payroll software with Interbacs.
What is payroll software?
Payroll software is a digital solution that allows organisations, accountancies, and bureaus of all sizes to manage employee salary payments accurately and securely. Bacs payroll software enables businesses to pay employees on time, while also integrating seamlessly with accountancy platforms and internal systems.
Payroll software is flexible because it adapts to businesses of any size and in any industry. It provides security because it processes payments safely. It supports integration because it connects with essential financial and HR tools to keep operations efficient.
There are two main types of payroll software:
On-premises payroll software
On-premises payroll software is hosted and managed directly on a company’s own servers. This approach gives businesses a high level of control over their payroll process. It supports data privacy because sensitive employee information stays in-house. However, it raises DR concerns because maintenance and backup responsibilities remain with the business.
Cloud-based payroll software
Cloud-based payroll software is hosted on secure remote servers and accessed online. It is the more prevalent and preferred option because installation requires minimal upfront investment. Cloud payroll software increases accessibility by supporting remote teams, improves flexibility by enabling payroll to be managed anywhere, and strengthens compliance because robust security safeguards employee data.
How does payroll software work?
Payroll software processes employee information such as names, bank details, and calculated net pay. It sends this data to Bacs to ensure salary payments reach employees on regular paydays. Payroll software integrates with CRM, ERP, or accountancy systems so that tax, benefits, and net pay are calculated accurately.
Payroll software generates reports at the end of each pay period or month. These reports allow businesses to analyse payroll data for improvements, ensure continuity, and maintain compliant financial documentation. Payroll software supports compliance because it records every transaction clearly, helping businesses meet legal and regulatory requirements.
5 payroll software business benefits
Time savings
Payroll software saves time because it automates complex processes that would otherwise consume hours of HR and administrative effort. It eliminates inefficiencies created by outdated or inflexible payroll systems and supports bespoke or irregular payments, such as for contractors, without additional strain on teams.
Cost efficiencies
Payroll software reduces costs by removing the need for a full in-house payroll team. Partnering with a Bacs payroll bureau provider introduces advanced functionality, integrates with internal systems, and delivers customisation while simplifying reporting. This creates a streamlined and cost-effective payroll process.
Information security
Payroll software strengthens information security because it protects against human error, data loss, and the risk of breaches. A Bacs payroll bureau solution uses encryption, approvals workflows, file validation, and secure reporting to safeguard sensitive information. It also complies with GDPR and other regulatory requirements, giving businesses peace of mind.
Scalable option
Payroll software supports scalability because it adapts to business size and workforce changes. Whether you are growing or adjusting your team numbers, payroll software aligns with your operations and ensures payroll processes remain efficient under future conditions.
Discover productive payroll software with Interbacs
Interbacs payroll bureau software is dynamic and secure, built to handle the demands of modern payroll management. In the UK, around 80% of employees are paid through Bacs direct credit, which makes choosing the right solution crucial for business continuity and compliance.
Interbacs’ Bacs-approved bureau software is ideal for enterprises that manage Bacs payments for customers. Unlike a bureau-managed service, Interbacs software empowers companies, such as financial service providers, accountants, and payroll bureaus, by giving them direct control over payroll operations.
Interbacs payroll bureau software streamlines payroll because it enables businesses to submit files directly to Bacs. It increases efficiency because multiple files can be managed from one intuitive platform. It improves accuracy because payments are processed on time and with advanced error-checking. With bespoke customisation and expert support, Interbacs ensures payroll processes remain secure, compliant, and reliable.
Looking for payroll service support? Get in touch with our expert team for a friendly chat and to discover more about payroll bureau software.
Photo © by Nastassia Samal from Getty Images
