Payroll is a crucial part of most businesses. Efficient and effective payroll systems will ensure that employees are paid on time, deductions are taken accurately, and data stored safely. Payroll management can take a large amount of time and resources, but being organised and having the right tools in place can help make it a smoother process. Here, we go through several key elements of payroll to help your small business get it right.
Understand your obligations
Firstly, it’s essential to understand regulations and your legal obligations when it comes to payroll. It is only used for employees of your business – not for external contractors. There are some deductions which are required by law from your employees, for instance, the right amount of income tax as well as national insurance contributions. If an employee must make student loan repayments, this should also be deducted from their pay, in addition to pension contributions.
Pick the right software
You need the right tools for the job – so picking efficient, cost-effective software is really important for implementing a streamlined payroll system. If you already have accounting software set up, you may be able to add on a payroll feature so everything is in one place. Alternatively, you can invest in separate payroll software. The key is to ensure the software works for you and your business – whether that’s a cloud-based solution, software that can manage timesheets and other HR functions, or capable of specific reporting. For instance, a prepaid account for businesses may be an effective solution if you’re looking to minimise paperwork and streamline workflows.
Record data safely and accurately
As part of the payroll process, you’ll need to record employee data accurately and safely. Information you require may include their name, address, national insurance number, deductions and so on. You will need to keep this accurate and up to date, so make sure you can easily and quickly change this when necessary. You may also be required to store certain employee information for a number of years, even if they have left the business – so make sure the software or system you choose can do this safely. Your business will need to ensure personal data is being handled correctly in line with GDPR regulations.
With many elements to consider and legal regulations to follow, it’s essential to implement effective and efficient payroll systems. If you’re an entrepreneur and payroll isn’t your strong point, that’s ok. There are many companies you can outsource your payroll management to, who have the skills and experience to help you manage it in a way that works for your business.