While a payroll system might be one of a business’s most important functions, it can also be one of its most expensive. Good payroll systems keep the wheels of industry turning within your workplace, and not only do they ensure that your staff get paid on time, but they can also be used to manage your company’s accounts.
In addition to the expense, keeping a good, accurate and efficient payroll service can be extremely time consuming and, when it comes to business, time is money. There are, however, a number of tips you can follow to reduce the impact on the company coffers and the hours you spend on making your system work.
1) The best thing you can do is get to grips with technology. Payroll software turns a manual task into an automated and streamlined system, leaving minimum chance of human error. Most companies use payroll software, reducing the time and money spent on maintaining the service. In addition, good payroll software will have other functions, allowing you to keep a tab on the accounts at the click of a mouse and merge all your databases to gain an easy-to-read overview of your company’s spending. That’s going to be vital when it comes to deciding whether to implement pay rises or when streamlining might be appropriate. You don’t have to have an accountancy background to use one, as all the jargon is removed, meaning that even if you’re a one-man band, they can be simple to use.
2) Break it down to the basics. Many SME owners make the mistake of initially trying to include every detail in their systems. That’s fine if you’re using payroll software, but a real headache if you’re trying to do it manually! If you’re using the latter method, then try and keep the system as simple as possible. This will be reflected in your business policies, such as how the company approaches paid time off, attendance issues, commission and reimbursed expenses. Make your policies as simple as you can to begin with; there’s plenty of time to add further detail as you grow later on.
3) With cheques being slowly phased out, you might as well stay ahead of the game. Many businesses use electronic payment systems such as BACS to pay their employees. Much like payroll software, it means you can call up details of payments to staff and suppliers relatively quickly. However, unlike payroll software, it won’t allow you to track your company’s spending behaviour, but it will make your accounting a bit easier. In addition, eschewing paper in favour of technology can save you some cash. The Office for National Statistics estimates that businesses can save around £100 per year by using electronic payment methods rather than the company chequebook.
A good payroll system is vital to keeping on top of the financial aspects of your business and for keeping your employees happy. In order to make sure yours is time efficient, you’ll need to embrace technology, good planning and a little common sense.