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Payroll software trends 2022
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IRIS stays on top in payroll as users switch

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Thanks to its portfolio of nine products, the IRIS Software Group’s payroll business is thriving, according to AccountingWEB’s latest State of the Nation software survey.

8th Aug 2022
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“Taken collectively, IRIS is the clear leader in terms of payroll software usage and choice across businesses and practices,” commented AccountingWEB head of insight Julian Green.

Cumulatively, when asked if they would consider buying new payroll software in the next 12 months, 34% of all respondents in the 2022 State of the Nation software report said they would choose an IRIS brand, led by IRIS Payroll with 11%. 

Within small firms with turnover below £250,000 IRIS brands accounted for 24% of payroll software use. Among medium-size firms (£250,000–£2m turnover) IRIS brands were used by 41% of respondents, with all brands increasing incrementally. The developer’s payroll market share rose to 47% among larger firms, with IRIS Payroll and IRIS Bureau Payroll driving the growth. 

Business users moving to cloud

IRIS will face renewed competition in the year ahead, however, as users move towards online alternatives to their existing payroll software. As we are seeing with core accounting software upgrades, a lot of payroll replacement purchases are being driven by medium-size and large businesses.

Last year, 22% of medium/large businesses said they intended to change their payroll software in the next 12 months. In this year’s survey, 37% of business respondents wanted to change their payroll system. In comparison, 15% of practitioners intended to change. 

The same percentage (37%) of business payroll users in this year’s survey said, “Payroll would be easier to administer remotely if we had a cloud system”, compared to 26% of practice respondents.

Looking at payroll software buying intentions for the next 12 months (see chart below), cloud products (MyPAYE, The Payroll Site and Staffology) figured in the buying plans for 17% of business users. The Xero-compatible MyPAYE app was leading this pack with 11%.

According to Green, the battle for second place in the payroll software market is a tussle between BrightPay and Sage. 

2022 insight survey: Payroll buying intentions

2022 payroll software buying intentions from the 2022 AccountingWEB State of the Nation software report

BrightPay remains firmly in the top three most likely choices for new payroll software across all practice segments, but has struggled with falling usage. The BrightPay figures may be affected by its strong performance during the pandemic, when furlough work intensified payroll software usage, but there were also signs that business users were struggling with the lack of flexibility of its desktop-based product.

“The lack of a cloud solution and poor communication about when it will arrive is also causing a deterioration in BrightPay’s Net Promoter Score,” said Green.  

Small firm payroll trends

As well as having a stronghold among business customers, Sage is well represented in several practice segments. According to Green, the desktop favourite Moneysoft remains prevalent among traditional smaller practices, but even in this heartland its use is falling.

“Moneysoft is in decline with 44% usage in Q4 2021 and only 16% in the latest survey saying they would choose it if they were to change providers during 2022,” said Green. “The opposite is true of Sage Payroll, IRIS Payroll Professional, 12Pay and Staffology.”

Clarify requirements

AccountingWEB payroll commentator Ian Holloway confirmed that IRIS seems to have improved its standing in the payroll market. “I have always considered this product to be for small employers, yet their reach now covers all sizes of employers across a wide range of sectors. I have also heard good things about the support they are able to provide, which really does aid retention. When choosing a system, it’s not just functionality that should be considered, but the back-up and accompanying resources.”

Moneysoft has not really changed its product as the market has evolved, he continued: “It does what it says on the tin and pays people. They really need to up their game if they are to remain a competitor,” particularly as Xero is beginning to demonstrate its credibility in the market.

“Undoubtedly, clients will want to move to cloud-based solutions, not least for the 24/7 access and the fact that software changes can be made quickly both by employer and provider,” he said. 

Yet, cloud payroll systems were not a panacea, Holloway warned: “Employers have a statutory obligation to be compliant with so much legislation, for example the laws of taxation, social security, statutory payments and national minimum wage. Don’t hurry to upgrade your software until you have exactly identified your non-compliant areas. It could be that there are internal issues that will not be solved by upgrading software – if you put rubbish in, then rubbish will come out regardless of your software solution.

“Further, could your current software handle these non-compliance issues, rather than changing providers? Too many times I have seen employers jump ship from one provider to another when, in fact, the previous provider could have sorted those issues if they had only known there was an issue. 

“Talk to your provider but, more importantly, look at yourself and your own operation. It could be that the problem lies internally and no upgrade in the world will sort that out.”

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Replies (5)

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By Paul Crowley
08th Aug 2022 18:32

If IRIS were confident of their products then they would not require the 12 month lock in
Other providers seem to have more confidence in their products
IRIS unable to openly price products is real problem. Their Sales office claims that all prices are bespoke. Prices are bespoke, products not so.

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By ireallyshouldknowthisbut
10th Aug 2022 09:30

Moneysoft seems to get a bit of a kicking on this article. Looking at your graph it would seem they have a bigger market share of the practice market than all the IRIS products put together.

It might look bad, but boy it works well.

I know Brightpay also gets some rave reviews and is well regarded on here.

Combined they seem to take well over 50% of the practice market, with the huge marketing spends of IRIS and SAGE not making much of a dent in terms of actual take up.

Which goes to show decent products at sensible prices spank the big boys, no matter how much they spend on adverts.

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By djn
11th Aug 2022 11:05

We have used iris for almost 30 years. Currently use IRIS ernie which is a good product but a little old fashioned.

The cost is crazy which has forced us to look elsewhere. We are moving to brightpay in April as the cost is roughly half and it looks like a better product.

IRIS charge for everything- extra users, extra clients, Auto enrolment.

The final nail in the coffin was when they wanted £1,500 to show us how to set up batch processing after having installed the update for us and being faced with a new screen every time we log in. Very poor.
Not looking forward to the change but long term it's the right thing to do.

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By Silver Birch Accts
11th Aug 2022 13:10

Keytime Payroll is , I believe, owned by...IRIS.

SAGE payroll, has always been lousy.

If Moneysoft does what it says on the tin, then that is fine by me. Why pay extra for bloatware and fancy colours. It remains a good product at a good price and they do not pester the life out of you unlike IRIS. I was with Keytime, then IRIS purchased them They are expensive and never leave you in peace. Their latest idea is to be a Staffing Agency, constant emails on all their new ideas. Moneysoft never pester you, and all the better for it.

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By rmillaree
11th Aug 2022 16:59

Wow payemaster is still going - unbelievable - that was past its best 15 years ago when we ditched it for moneysoft.

". I have also heard good things about the support they are able to provide, which really does aid retention."
Fair play if the support is decent - but on accounting web i have only heard bad things about customer suppoirt ref IRIS products.

Ok the payroll support may be different and superior to their normal tripe but random opinions of one peep (albeit in-house) lauding one companies support whilst saying nothing about other companies seems to be slightly skewed and lacking of backup info. would be happy to see it confirmed if their payroll support is top notch but seems slightly one sided pitch.

Moneysoft pretty much always answer the phone when i ring and normally with highly experienced person top boot - is is really the same for the iris suite of products at a superior level thats warrants setting them apart from the rest?

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