Nobody’s favourite part of running a business is paying taxes and organising payroll. In an ideal world, business owners would spend as short an amount of time on this as possible, in order to free up their time to focus on business growth and strategy.
?Pay is probably the most emotive subject for staff in any organisation. It is critical that people are paid correctly and on time,” explained Raj Sond, GM of First Data.
?Small business owners wear multiple “hats” they are the salesperson, the accountant, the marketer, the service manager and more. Running a payroll can be another laborious task for the already time-poor business owner. Not only, is there a huge amount of data collection and calculation required, but there are also many compliance and reporting rules that businesses owners must understand and adhere to. There’s no room for mistakes, as these could result in unhappy demotivated employees and possibly penalties.
What’s more, the risk of human error is high, especially for those businesses still relying on spreadsheets.
We asked the business community what steps have been taken to help cut down on the time it takes to run payroll, and one of the most popular answers was also one of the least surprising let someone else do it.
?Our accountants provide first class support and advice. It really is worthwhile seeking out the right accountancy partner, as our business has grown we have changed to a practice that is more aligned with our business and it’s working great,” said Angela Love, director of facilities management business, Active.
Rob Liddiard, co-founder and CEO of messaging app Yapster, explained: ?We have fully outsourced the payroll function. We do not, however, avoid employment contracts in order to streamline payroll we strongly believe that the benefits of having full time employees outweigh the costs.
Investing in software
Of course, there are downsides to outsourcing too, and it’s not for everyone. It can be expensive, and some business owners don’t like the idea of processes being handled elsewhere.
For those that would like a helping hand to carry out payroll in-house, investing in software may be the answer.
?Recently we ve updated invoicing and accountancy software to Sage 200. Probably aimed at larger businesses than ours that was a long-term decision to make us more efficient. We also added a programme that sends out all the statements and invoicing by email who has time to spend stuffing envelopes and sticking on stamps?” said Chris Vincent, owner of V4 Wood Flooring.
It doesn’t just have to be for month-to-month payroll either, it can be used for all sorts of tasks, including year-end:
?We use a payroll software package, which means the year-end process is usually quite simple. Our service provider sends out emails with advice on what details to have ready for processing the year end, but we generally follow the same system which is to check employee details such as addresses, bank details and tax codes, order in payroll stationery such as P60s, ensure that the software has had all updates installed, process any leavers, and complete RTI submissions for the final month,” said Peter Tuvey, co-founder and CEO of the UK’s first revenue-based finance provider, Fleximize.
Software solutions such as this also have process flows to prevent any parts being missed out so in the long run, they can save you time.
There are plenty of different ways to improve the efficiency of payroll processes, but essentially business owners need to ensure they find the right fit for their business.
Larger businesses may well be able to take on in-house accountants, but for smaller businesses with ambitions of serious growth, a scalable cloud service could well be the best bet.
For more information about achieving payroll efficiency, click here.