A reliable and efficient Payroll system is critical to the successful running of a small business. By correctly taking care of salaries, taxes, bonuses and other benefits, you are keeping employees happy and satisfying your legal obligations. In this article, the Shorts Payroll team will outline what small businesses need to know about Payroll.
What is involved in Payroll?
Payroll has various components that are all very important to get right. The most common considerations that must be made relating to team remuneration are:
- Wages and salaries
- Employee benefits
- Legal requirements
One of the biggest challenges facing small businesses is managing an effective Payroll with limited resources and expertise in-house. It can naturally be difficult to keep on top of evolving regulations and always remain compliant.
Keeping your Payroll compliant
Compliance lies at the heart of the Payroll system of any business, big or small. There are lots of rules regulating how Payroll works in the UK, including:
- Tax and National Insurance
- Minimum wage requirements
- Overtime pay
- Keeping accurate records
- Employee benefit rules
- Statutory payments
- Correctly managing leave, including sickness, holidays and compassionate leave
- Avoiding discrimination
- Protecting data and privacy
This is a lot to consider, especially for a smaller business without a trained and qualified in-house Payroll function. To make matters trickier, non-compliance can result in hefty penalties, legal issues, and damage to the reputation of your business.
So what are your options?
Outsourced Payroll for small businesses
Often, the most effective and reliable method of managing Payroll is to outsource it to a reputable Managed Payroll provider. This can streamline your Payroll process and free up valuable time and resources within the business.
Here are some key advantages:
- Cost-effectiveness: A Payroll provider will charge you a fee for their work, but this will generally cost you considerably less than hiring, training and retaining an in-house Payroll function.
- Compliance: Payroll specialists are at the forefront of their industry and possess specialised knowledge of the latest tax regulations and employment laws.
- Scalability: Your small business may not always be small. A good Payroll provider can scale up with you, ensuring you always have the appropriate level of support available, even during periods of rapid growth.
- Data security: A reputable payroll provider will have robust security measures to safeguard sensitive employee data and reduce the risk of data breaches.
- Timely Pay Processing: No matter what happens elsewhere in your business, Payroll outsourcing helps ensure timely and accurate pay processing.
- Advanced Technologies: By working with a Payroll specialist, small businesses may gain access to cutting-edge Payroll software and tools without investing in them themselves.
Outsourcing your Payroll frees up your valuable resources, ensures compliance, and allows you and your senior management to focus on what matters most, driving sustained growth and success.
The Shorts Payroll team brings over 100 years of combined experience to your business, so you can relax knowing that your team is paid accurately and on time. If you need help with your small business Payroll, our team will gladly help.
Payroll software for small businesses
If you prefer to manage your Payroll, other options are available to improve accuracy, compliance, and efficiency. One of the best options for a DIY Payroll function is to use dedicated Payroll management software, such as Xero.
Xero facilitates comprehensive management of a company's Payroll system, covering your scheduled salary disbursements, employee taxes, and National Insurance Contributions (NICs). It can save a lot of time and headaches by automatically recording journals in the accounts system.
Additionally, Xero offers employees a personalised portal to access their pay slips and update their personal information, such as addresses, whenever required. The system includes user-friendly features like straightforward timesheets and self-service holiday/sick leave functionality.
If you are not set up with Xero and are interested in learning more about it – our Genus Management Accounts team is well-positioned to advise.
Sue manages the Shorts Payroll team, implementing efficiencies and simplifying processes to ensure clients receive an accurate and timely payroll experience.View my articles