Start from month end, not from the feature list
Every HRMS demo looks the same in the first ten minutes: an org chart, a leave calendar, a dashboard. The differences show up between the 25th and the 7th, when attendance has to become a salary register, the register has to become challans and a bank file, and somebody has to explain why a payslip is ₹1,340 short.
The five checks below are in the order in which things go wrong: payroll first, because a wrong salary is the failure the whole company notices on the same day, then the attendance that feeds it, then the data, price and migration that decide what the software costs in year two.
The five checks
1. Statutory payroll inside the run
Ask one question. When payroll is processed, does the system itself compute PF on the right wage base, ESI with the contribution-period rule, professional tax for the state each employee works in, and TDS under the regime each employee chose? Or does it produce a gross salary and leave the statutory lines to an export or a second product?
A system that computes statutory dues inside the run also produces the PF ECR file, the ESI contribution list, the professional-tax challan per state, the Form 24Q data and the bank file from the same numbers, so the payslip, the challan and the return cannot disagree. A system that hands off after gross leaves those reconciliations to you, every month.
- PF with the ₹15,000 wage ceiling as a choice per company or per employee, not a fixed rule, and the pension-scheme split done correctly.
- ESI eligibility at ₹21,000 gross checked at joining and at every revision, with coverage held to the end of the contribution period after a raise.
- Professional tax mapped to the branch state, including the states that levy none, with the February adjustment in Maharashtra handled.
- TDS estimated for the year and deducted monthly, with Form 12BB declarations, proof verification and Form 16 Part B from the same data.
If the vendor cannot show these in the payroll module during the demo, they will not be there in month one either.
2. Attendance sources and reconciliation
Payroll is only as right as the muster. Ask where punches come from and whether the system takes all of yours: biometric devices at a gate, GPS-tagged mobile punch for field staff, web punch for desk staff, and supervisor entries with an audit trail. Then ask how punches become a judged day against the shift the person was rostered on.
The word to listen for is regularisation. A missed punch should raise a request that goes to the manager, not a message to HR, and the muster should lock before payroll reads it. The attendance module page describes what a judged day involves, and the biometric versus mobile guide covers which source suits which workforce.
3. Data ownership and export
You will leave this vendor one day, or be audited, or need three years of salary registers for a due diligence. Ask: is our data in a database of our own or in a shared table with a company column; can we export everything, documents and audit trail included, whenever we want; and for how long after cancellation.
Salary and identity data for Indian employees is personal data under the Digital Personal Data Protection Act, 2023, so ask where the servers are as well. Kuzhu gives each company its own database hosted in India, with a full export at any time and for 90 days after cancellation; whichever vendor you choose, get the equivalent in writing.
4. Price at your real headcount
HRMS pricing in India comes in three shapes: per employee per month, company-level tiers with a monthly minimum, and quote-only enterprise contracts. Each hides a different cost. Per-employee pricing is cheap at 30 people and needs a second look at 300. Tiers with minimums mean a 22-person company pays for 50.
Ask for a written quote at your actual headcount with every add-on listed: implementation, per-module charges, SMS or WhatsApp credits, biometric integration, support tier, training and migration. Compare the second-year cost, because that is the price you will pay for a decade; the pricing guide walks through each component.
5. The first month
A migration is a project, and the vendor is the project manager. Ask who imports your data, who validates it, who configures the salary structures and leave policies, and whether a parallel payroll is run against your current process before you switch.
The right answer for a company under 500 employees is two to four weeks, with one payroll month computed in both systems and reconciled to the rupee before anyone is paid from the new one. The switching page shows what that month looks like in practice.
Questions to ask every vendor
| Question | Good answer | Red flag |
|---|---|---|
| Does payroll compute PF, ESI, PT and TDS inside the run? | Yes, with the ECR, challans and Form 24Q data from the same run | We integrate with a payroll partner, or we export to your CA |
| How does a missed punch reach payroll? | A regularisation request to the manager; the muster locks before the run | HR corrects the attendance report before uploading it |
| Where is our data, and can we export all of it? | Own database, hosted in India, full export at any time and for a stated period after cancellation | Exports through reports only; ask your account manager |
| What is the price at our headcount, all in? | A written per-employee quote with every add-on listed and GST shown separately | A starting-from figure, with the extras discussed later |
| Who does the migration, and how long does it take? | A named person, two to four weeks, parallel payroll included | Self-serve import with documentation and a ticket queue |
The demo: ask to see the 28th of the month on your own data
A scripted demo shows the vendor’s data on the vendor’s best day. Ask instead for a working session on twenty of your own employees, including the awkward ones: a PF-excluded senior hire, an ESI-covered helper, a night-shift worker whose shift crosses midnight, a branch employee in another state and a resignation mid-month. Then ask the vendor to run that month from start to finish.
- 1Import the twenty employees with their salary structures from your spreadsheet, and watch what the import rejects and why.
- 2Load a month of attendance from your device export and see the judged days, late marks and loss-of-pay days the system produces.
- 3Run payroll and compare the register with what you actually paid those twenty people last month, line by line.
- 4Generate the PF ECR, the ESI list, the professional-tax summary per state and the bank file from that run.
What to ignore
Two things dominate HRMS marketing in 2026 and neither belongs in the decision. The first is AI: chat assistants for leave balances, résumé screening, survey analysis. None of it makes a wrong PF contribution right, and a feature every vendor will have within a year is not a reason to pick one now. The second is dashboards. Every chart is drawn from the registers you are checking in the demo; if those are wrong, the charts are wrong in colour.
The checklist
- 1Write down how you actually pay: components, PF basis, ESI branches, professional-tax states, leave year, shifts, overtime rule and rounding.
- 2Pick twenty employees who cover the awkward cases, and export their records and one month of attendance.
- 3Shortlist three vendors and get a written quote from each at your real headcount, with every add-on and GST shown.
- 4Run the 28th-of-the-month session with each vendor on your data, and keep the reconciliation sheet.
- 5Get the data and migration answers in writing: database, hosting, export, retention after cancellation, weeks to go live, and whether a parallel payroll is included.
- 6Decide on the second-year cost and the payroll match, not on the dashboard.
Kuzhu runs the 28th-of-the-month session on your own data, with a quote at your real headcount.
Book a demo on your numbersQuestions people ask
How long does HRMS implementation take in India?
Two to four weeks for a company under 500 employees: a week to export, validate and import data, a week to configure salary structures, leave policies and shifts, a week for a parallel payroll reconciled against the current process, and a week to bring managers and employees onto the app. Multi-entity and multi-state companies spend longer on configuration.
Should a small company buy an HRMS with payroll, or payroll software alone?
If everyone is salaried, office-based and paid the same every month, a payroll product can be enough. The moment attendance from devices or phones decides pay, through loss of pay, late marks or overtime, the muster and the payroll need to be in one system, or someone re-keys one into the other every month and the two disagree.
What is the difference between HRMS, HRIS and HCM?
An HRIS is the employee record and the documents around it. An HRMS adds the processes that run on the record: attendance, leave, payroll, approvals. HCM adds talent management, such as performance, succession and learning. In India the three terms are used interchangeably in marketing, so judge a product by whether payroll and attendance are inside it, not by the label.
Is cloud HRMS safe for salary data in India?
Yes, if five things are true: the data is hosted in India, encrypted in transit and at rest, access is role-based down to the field, every change is logged with who made it and when, and backups are taken daily with restores tested. Ask for each in writing; under the Digital Personal Data Protection Act, 2023 the company, not the vendor, answers for employee data.
How many HRMS vendors should we shortlist?
Three. Fewer gives you no comparison on price or on the payroll reconciliation; more than three means nobody on your side runs the working session properly with any of them. Include at least one vendor whose pricing model differs from the others, so the quote comparison shows what a minimum or a per-module charge does at your headcount.
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