Managing payments of employees is known as payroll. Payroll is considered as one of the most important components of business. If you are having a staff, you need to pay them correctly and on time for smooth functioning of your business. Some small businesses are using manual process to pay their employees & keeping payment notes in a spread sheet or other document whereas some find option of outsourcing their payroll process to accountant/bookkeeper /payroll Company easiest of all.
Due to timely updations in technology, there is another option which you can use to handle your in-house payroll operations and that is by making use of payroll accounting software. You can easily process your payroll with the help of payroll accounting software which not only saves your time & money but also increase your business efficiency.
How small businesses should manage their payroll system?
As a small business owner, you need to pay your employees every time you take their services but it is not enough as there is lot of other information which you need to record in order to manage your payroll system properly. Payroll includes salaries, hours of work & rates, bonuses, commissions, taxes, pensions etc. and for managing all these things, you need to update your data on regular basis. Small business operations might include the following –
- Staff payments – You must record dates as well as amount of payments you made to your staff.
- Types of payments – You must be aware about different types of payments which you need to do while making a payroll due to difference between salaries, hourly rates, commissions, bonuses, taxes, pensions etc.
- Taxation – Make sure that you must provide information to the tax authorities regarding the tax you have collected from your employees and submitting to the tax department on their behalf.
- Reporting – Kindly remain up to date with the reporting dates or deadlines announced by the government for employees pay & deductions.
- Leave entitlement – You must track holidays availed by your staff inclusive of the leaves carry forward to the next year.
- Sick leaves – You must track sick leaves taken by your staff.
- Maternity & paternity payments – You must keep record of maternity and paternity leaves taken by your staff. This area requires special attention and good understanding of government regulations due to its complexity.
- Superannuation – You must record amounts paid by you and your staff in superannuation fund for future pension
- Expenses payments – You must keep record of expenses – when and how much amount has been reimbursed?
- Benefits & perks – You must have a record of benefits & perks you provided to your employees along with taxes.
- Important dates – You must keep the record of dates – when an individual joins the organisation (date of appointment) & left the organisation (Date of resignation or termination) You need to keep in mind each and every point mentioned above to manage your payroll effectively and efficiently.
- Compliance cost – It is mandatory for every business to remain compliant to the government rules & regulations – Employment laws, taxation, reporting & payroll. Compliance takes much of your time and time is money. In today’s time, small business owners need to perform different responsibilities such as sales lead, bookkeeper, HR manager as well as director. Hence, addressing these things and remaining on top of compliance takes much of your valuable time. Therefore, you must take adequate steps to save your time which results in saving your money too. Why don’t you use good quality software to manage your payroll? – It not only saves your time but money too. It saves your enough time and even crosses the amount you have spent on its buying.
How much worth is payroll software to your business?
Some of the accounting systems are having built-in payroll module whereas for other payroll software’s you need to pay extra amount. It’s time to analyse that the payroll accounting software you are using is worth the money & saving your time or time has come that you must change your payroll accounting software by asking yourself these 4 questions –
What will the software cost you?
There are different software’s in the market but which one is best for you is what you have to research. Research the market and identify the software which is best for your business. Some software’s requires regular updates or monthly subscription fees whereas some software’s provide unlimited extra users free of charge and saves much of your money.
How much does payroll work cost you now?
As per the business concept, time is money. In order to get estimate about the money, you need to estimate the time you and your staff spent on the payroll related work. Add the payroll time you spent in completion of payroll tasks and multiply it with hourly rate to calculate the amount per annum cost of payroll related tasks for your business.
Will the software help your business stay compliant?
Yes, if you are having both the accounting and payroll module in a single software, there are fewer chances of errors which are often common in manual data entry. With the help of automated and HMRC compliant software, you will feel relax knowing that you are compliant.
Why can’t I manage payroll on a spread sheet?
As you see that many of the businesses still rely on excel for payroll processing but they forget that use of spread sheets often lead to errors. It’s a complex application and need expertise along with high complex calculations which not every person can do. Therefore, it would be better that is you are using excel, time has come that you must move from it to a good payroll accounting software unless you need to face fines & penalties. Spread sheet do not guarantee reliability and can lead to loss of data whereas payroll software can help you in backing up your data automatically in case you lose it.
Key Benefits of Online Payroll Software
There are numerous payroll packages available online, few of them runs on single PC but now day’s new cloud accounting software packages are running online and you can use it anytime from anywhere. The benefits of online payroll software are as follows –
- Access your data anytime & anywhere – With the help of new cloud based online payroll software, you can access your data anytime, anywhere with the use of internet connection.
- Multiple access – You can give multiple access of this new cloud based online payroll system to the person who is managing your payroll system. Your bookkeeper or accountant can manage it easily from remote place.
- Data security – Cloud based online payroll system provides online data security and reduces any chances of loss of data. Suppose, you are using an office laptop and same get lost or stolen and your vital payroll information get lost or hacking can be done to track your financial details, these situations can put ill effects on your business as well as on your staff.
- Work from anywhere – In case you are on a weekend or on a business trip or at some remote location and you need to check some important figures online – Just log in from any system, any time and get access to any information as everything is available online. It makes you free from your company, your desk and even your office.
- Tax calculations – You don’t have to manually calculate the tax owed for each employee as cloud accounting payroll software can calculate all this for you automatically.
- Application and leave approval – Your staff can easily apply for annual leave through the payroll system and you can easily approve it with few mouse clicks. Hence, it saves your time and paperwork.
- Full tracking & recording – Make sure that the software you choose must include reimbursements or claims for work expenses, leave grants & other payment etc. It must create an audit trail of every payment you made towards your staff.
Choosing the right payroll software not only reduces your manual work but also saves your time & money.