When it comes to payroll the size of your business does not matter. It is easy to think that a payroll provider is unnecessary expense, however the problems that a small business faces are just as real as its larger counterparts.
In this blog Neil Lagden, Head of Bond Payroll Services explains why payroll is a necessity for any business regardless of its size and outlines the payroll options available to businesses.
Do I need payroll?
Paying staff is essential no matter the scale of your business – whether there is one employee paid a monthly salary, or a complex payroll paying various employees on various amounts, the functionality that a payroll provider can offer to support your business is vast.
Many businesses choose to manage the payroll in-house. Whilst this may seem like a cost effective method, the person employed to run it should have the necessary knowledge of PAYE to ensure that your business is meeting legislative requirements. An in-house approach can be time consuming and administratively heavy, so businesses should be prepared for lots of manual data entry, as well as producing reports which may not provide the detailed knowledge required.
Relying on one individual to process payroll in-house may also not be without error. Having vast amounts of manual admin to complete, reports to run and legislation to adhere to can be difficult to manage. Holidays, sickness can all have an effect on the efficiency of the payroll and contingency plans should be put in place to reduce risk.
The Payroll industry, like all industries, is constantly evolving, therefore the Payroll Manager will have to make sure that he or she is keeping up with any changes and updating processes accordingly. An in-house Payroll department more often than not only consists of one person; therefore it can be quite a solitary role with very little support from employees with an understanding of the area.
Outsourcing to a payroll provider
Outsourcing payroll can be a great way to manage the process. Having a specialist payroll organisation manage payroll on the business’ behalf can alleviate the stress and pressure of managing a payroll with very little time and capacity. Selecting an outsourced payroll specialist must be a thorough process. It is critical that the provider understands your business and its intricacies – it should work as an extension of your team of employees and be a trusted company – BACS and ISO accredited.
There are a number of solutions available on the market that can process payroll, but knowing which one to select can be a difficult choice to make. Having a basic software which is only implemented on a single computer can be restrictive – so a scalable solution that can grow with your business is a good option to have. A good payroll solution will manage the calculations, production of payslips, HMRC forms and calculations, National Insurance and also adhere to recent AE legislation. However, some solutions only manage some of these functions and require ‘bolt on’ functionality in order to manage all of these processes. Therefore, it is advisable to select a solution that gives you the most for your money, but also provides high levels of customer service and support.