7 Tips for Managing Your Business' Payroll
When you are a business owner, it might seem as though there is a never-ending list of things that you need to manage, but one of the most important is your business payroll. This includes handling salaries and bonuses, and making sure that it all reaches your employees on time and within the law.
This can leave you feeling as though your hands are full, which is why we have put together our seven best tips to help you manage payroll effectively.
1. Stay on top of legislation
There are plenty of laws in place to make sure that your employees are paid fairly and in the right way, that their privacy is maintained and that all necessary tax is paid, and you need to be able to stay on top of all of them. There are GDPR laws to ensure that all personal data is protected, whilst the Pay As You Earn (PAYE) system ensures that all of the correct Income Tax and National Insurance is collected.
As an employer, it is your responsibility to understand the laws and regulations, keep up to date with changes to them and make sure that your business is compliant. Failure to do can mean that your employees will suffer, and your business could be subject to some hefty penalties.
2. Keep accurate records
When it comes to managing your payroll, details are important. You need to make sure that you have the correct information for every single employee, otherwise they may not receive what they are due. You also need to make sure that any changes, such as their bank details, salary increases or bonuses are all properly recorded.
You also need to know their date of birth to ensure that they are paid at least the correct National Minimum Wage and their National Insurance number for tax purposes. If an employee gets married or moves house, you must update their records, and you should keep a track of any pension contributions that you are responsible for.
This all means that should an employee go onto maternity or paternity leave or need time off sick; you know what their financial entitlements and benefits are.
3. Create a calendar
Managing payroll can seem like a full-time job, as there is a lot to think about, so it can be beneficial to set up a payroll calendar to keep you on track. This means that you can keep track of the dates that payroll needs to be administered, as well as any dates such as bank holidays that might delay that in being processed.
It can show all pay periods, points for salary and bonus reviews and tax deadlines. Some payroll software programmes will have this included within them, but it is important that you keep an eye on them and add in anything of your own that might be relevant.
4. Automate your payroll
Many businesses are now signing up to payroll management software to help them out, as this can automate many of the payroll processes. What you need will depend on the size of your business and the way in which your staff are paid, as those who offer flexible pay to include bonuses and overtime will need a system that allows for a certain amount of customisation.
In some cases, this can be integrated with your accounting system to make for more streamlined financial planning and record keeping.
5. Call in the professionals
All of this can still seem like a lot to manage, especially for smaller businesses who do not have large teams of people that they can rely on. That is why more and more businesses are now outsourcing their payroll requirements to third party companies who are capable of taking it all on for you.
These accountancy firms specialise in managing tasks such as payroll and so they are already aware of all the pertinent legislation and key dates and can help to find solutions to making sure that your employee records are accurate, safe and secure.
There can be an extra financial cost in doing this, but it is often less than employing someone specifically for the job of managing your payroll, and they can be worth their weight in gold when it comes to helping you avoid some potentially costly mistakes.
6. Be transparent
Payroll shouldn’t be a guessing game, especially for your employees, so make sure that the entire process is transparent. Your employees should be clear on when they will be paid, the deadlines for submitting timesheets, the factors that might impact on what they are paid and what the company payroll policies are.
This helps them with their own planning and can give them some important peace of mind, and it can also help your payroll department to make sure anything they need is submitted on time. It is also important that employees know who to speak to if they have any issues regarding payroll so that problems can be dealt with quickly and sensitively.
7. Review your policies and procedures
It is important to put a payroll policy in place, but once you have done this, it should not be ignored. Make sure that you periodically revisit your policies and ensure that they are still fit for purpose.
You might want to update things as the business grows or as legislation changes or clarify things that seem difficult or vague. Your payroll team might be able to provide you with a list of common questions that need to be addressed within your policies, so don’t be afraid to fill in any blanks.
Managing payroll is very important, as without it, you will not have staff for very long. It ensures that people are correctly paid for the work that they have done, and so it needs to be a priority in every business. This needs dedicated time and planning to ensure that it is all actioned correctly and on time, as well as keeping your business on the right side of the law.
Rogers Spencer are Chartered Accountants in Nottingham who can provide businesses with tailored accountancy services, which includes Bookkeeping, Business Taxation, Private Client Taxation, Audit & Assurance and more.