26 Sep What are the key payroll management mistakes businesses make?
Payroll management is absolutely vital for any modern business. As with any accounting task, however, it’s important to ensure you steer clear of the main pitfalls associated with managing payroll.
Here are the main mistakes to avoid:
Modern businesses can be complicated, especially agencies. It’s not uncommon to work with full-time staff, freelancers, part-time workers and even other agencies.
As such, it’s vital to ensure you don’t end up misclassifying employees. This is especially relevant to freelancers: it’s important to make sure that you’re compliant with IR35 regulations. Different people you pay will need to be paid in the correct way, and businesses that get this wrong can easily be fined.
Payroll – especially for full-time employees – can be a complicated affair. There are multiple deadlines that HMRC will expect you to hit, with some of them being fairly regular.
The most complex thing to manage is that, actually, regulations on payroll change quite often, especially when it comes to PAYE. It’s vital that you keep up to date with the latest developments, and it’s for this reason that many companies work with a skilled payroll company, rather than handling their own accounts.
Not keeping backups of data
This is a practical issue rather than a financial one, but it’s worth reiterating. You’d be surprised how many companies leave their payroll information on a single computer, then find themselves in a lot of trouble if that particular computer goes down.
You should always keep multiple backups of all payroll information: it’s the responsibility of your business to do so, and HMRC can hand out strong penalties to companies that don’t.
Relying on software too much
It’s important to remember that while payroll software can be useful – and it definitely can add value – you shouldn’t totally rely on it. Remember, payroll software is only useful if the person using it is a skilled professional: it only stores the data, it won’t correct any mistakes!
If you’re going to use software, you need to have a skilled staff member to manage it for you.
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We offer a full, expert payroll management service, and we’d love to help your business out, so get in touch with us today.