15 Aug The Importance of Payroll
Most small business owners find themselves performing multiple roles for their company. With their plate always full, completing payroll can be a real challenge considering the fact that they need to be well versed in accounting, remember all the deadlines, and be willing to research all the laws. Truth been told, if you have a very simple payroll, this is something doable; something that you could consider doing yourself (or have a qualified staff member keep payroll processing in-house). But what happens when things are more complicated? You see, managing a payroll involves much more tan just writing paychecks. It comes loaded with responsibilities, which include, but are not limited to:
✔ Withholding employee taxes.
✔ Managing employee pension and health plan contributions.
✔ Deducting the right amounts of National Insurance.
✔ Calculating the right amounts to pay, as well as allowances, bonuses, and overtime.
✔ Creating statistics from inputting information related to monthly (or weekly) payments into the organisation’s computer.
For start-ups, this could turn into a nightmare, considering that new business owners have too much to think about already. That is where payroll services enter the equation. What Type of Payroll Best Works for Your Business? Depending on the circumstances and needs of your business, you have to get the type of payroll service that ticks all your boxes. However, with the plethora of options available, even this task could be overwhelming. The first step is to take a step back to think and prioritise your needs. Think about your budget and what exactly you need from your payroll service. Which features you feel your organisation will most benefit from? On the most basic level, you require a payroll service that monitors your employees’ salaries, and has everything recorded and organised for tax purposes. But, it’s not all about churning out employee paychecks. Some of the features you should also ask for are:
1. Employee tax payments – Complicated tax forms have to be well taken care of so you need someone to focus on filing and paying your business’ taxes and dealing with the processing of P60s forms, among others. If you manage to have the tax-related issues properly handled, you minimise the risk of something going wrong.
2. Pension services- Many online payroll services can make it significantly easier for start-ups and existing businesses to set up and monitor pension plans. They can even become your pension administrators upon your consent.
3. Paid time off- Keeping track of your employees’ hours, paid time off, and sick days is indeed critical to your corporate success. That way, you establish a win-win situation for both you and your employees, who can request time off easier that you can either deny or approve. What is in it for you? You get to know of employee overtime hours and breaks and how much you should be paying them.
4. Report filing- Not only do you need to fill all sorts of reports the government requires, but also send them in on time to avoid penalties. An online payroll services that can handle this for you is valuable. In short, you need a payroll service you can trust enough to make it your PAYE agent for PAYE and HMRC services and deal with the Revenue for you.
Why Consider Payroll Services?
First and foremost, consistent payroll services infuse a sense of security to your employees. Without a second doubt, payroll affects every aspect of your business, from its financial stability to your employees’ morale. Why so?
1. You Solidify your Company’s Financial Integrity In small businesses and start-ups, failing to pay on time signals a series of questions that threaten the organisation’s financial integrity. This is because employees are considerably more aware of the company’s financial stability, compared to employees working in larger businesses. If payroll is late, your staff will start underperforming with mathematical accuracy. You couldn’t ask for a worse case scenario. Having an employee that doesn’t care about their job, because of feelings of insecurity, should be avoided at all costs.
2. You Motivate your Employees to be more Productive That aside, payroll allows your staff to feel they are valued within the company. Typically, they undergo evaluations by their supervisors once a year, who make sure they reward good job done, in the form of bonuses, salary increase, or benefits. Simply put, the total compensation of every employee you have is built into payroll, and it has been evidenced that those that receive pension and insurance benefits feel they have more worth and become more productive.
3. You Save Time Did you know that the average small business owner dedicates up to 25% of their working hours trying to deal with employee paperwork? No matter how daunting outsourcing might feel, it can definitely free up significant amount of time that you can devote to other aspects of your business.
4. Payroll Services Cost savings Payroll services are cheaper than having to do all the work yourself. The same applies to hiring new staff. You will not only pay their salaries, but also additional costs, such as healthcare. Not to mention the various overheads that come along with paying recruiters, placing job ads, conducting interviews, and purchasing extra office equipment. This means that hiring an employee to handle payroll is, most of the times, a financially un-viable option.
5. They Reduce Errors A good payroll service will work closely with your business and inform you of the latest in terms of regulations and rules. Now many people know the complexities of ensuring that HMRC regulations are properly adhered to, as well as calculating tax. Changes in legislation often occur overnight and you need to have someone up-to-date with everything that goes around to avoid extra costs and major accounting issues. Handling your payroll in-house, you need to train an employee (or more) and always keep an eye to make sure they are well informed at all times. Too much time spent and too much stress for no good reason. You should be focusing on growing your business and only that.
Payroll service may be one of the mundane aspects of every business that requires lots of paperwork and long processes that can reduce productivity. But, for all the reasons mentioned before, and many more that will need hours to list, outsourcing payroll service will save you time and money, and help make your vision a reality while protecting you from any accounting-related pitfalls. For more information, everyone here, at SQK Accountancy, is happy to answer your questions and hear about your concerns. Just fill in this form and request a call back, NOW!