Take the pain out of payroll
Laurence Curtiss, ScottAdam Systems Ltd
If you run a growing business, payroll may seem like just another thing to worry about a load of bureaucracy that doesn´t actually add any value to the business and seems to get more complicated each year. But if you want to keep your business running, your people need to be paid accurately and on time. Furthermore, as an employer you are responsible for deducting PAYE and National Insurance contributions and paying them to HM Revenue and Customs (HMRC). Nobody wants to lose good staff because of an admin error or to receive an unexpected bill for unpaid tax. So how can you take the pain out of payroll?
Whether you employ just one person or one thousand, you are required to keep a record of all payments made to them, as well as deductions for tax, National Insurance (NI), student loans etc. Most businesses use specialised payroll software to calculate wages and deductions, make payments to HMRC and produce statutory reports at the end of the tax year. This software can save you time and money whilst ensuring that your payments are accurate and fully compliant with the latest legislation. Your admin will be reduced, freeing up staff to spend more time adding value to the business.
Payroll software is updated annually to reflect changes to tax and NI and to comply with new legislation. For example, this year the 10 per cent starting band for PAYE will be removed and changes to NI rates will be introduced. When selecting payroll software it is important to check that it meets the HMRC Payroll Standard. This will ensure that your calculations comply with current legislation and will allow you to make returns and payments electronically, saving both time and money.
Payroll is a business critical process and your software supplier should provide training, back ups and support to ensure continuity of the system. By choosing a package that is easy to use, you don´t have to be a payroll expert to keep the processes running. It´s also a good idea to run your payroll system on a dedicated computer or a server hosted by a third party to avoid problems if your other systems fail. Many suppliers will also provide assistance with year end procedures.
Catherine Hevey at The PCS Group has been using Access Payroll for nine years. "It has grown with the business," she explains. "We now have three hundred employees compared to 180 when the software was first installed. All our employees are paid by bank transfer and we submit our returns electronically to HMRC. This saves us time and money. It´s a good system and is easy to operate. The reports are useful, particularly the holiday and pay records which are very detailed."
As well as managing a wide variety of pay types and deductions including sick pay, maternity pay and pensions, the software should allow you to produce a wide range of reports at the touch of a button. Exception reports help you to validate your payroll before it´s finalised and data can be transferred to your management reports for forecasting and planning. At the end of the tax year Employer Annual Returns can be automatically generated for HMRC showing tax and NI deductions for the year, employer´s NI contributions, statutory payments, student loan deductions, expenses and benefits.
Integration with the main accounting system should allow payroll costs to be transferred to nominal ledgers and even to project costing at department, manager and job level. Timesheets can be entered straight into the payroll system with no re-keying, which saves time and reduces errors. Integration with MS Office in both directions allows your staff to work on payroll data using packages they are familiar with such as MS Word, Excel and Project.
Payroll software can do a lot more than just ensure that you meet your obligations regarding tax and national insurance. It can support your financial planning and management, improve staff motivation and retention and save you time and money. Maybe it´s time you took the pain out of payroll.
Laurence Curtiss is Managing Director of ScottAdam Systems Ltd.