There are more than 4.5 million private sector business entities in the United Kingdom currently. This was revealed in the latest report released by the Department for Business Innovation & Skills. The major share of these businesses is one man firms that do not employ any employees. For the 1.2 million businesses that do employ staff, paying the staff is one of their top priorities. The problem is the process is not that simple as doing a bank transfer each month. There are certain laws that dictate how tax and national insurance should be deducted from the employees. There are also rules to indicate how the payslip should be issued and what records should be kept when the tax man comes to visit you. All these requirements are listed under payroll. In fact, a small business can approach payroll functions in a number of ways.
Outsourcing their payroll functions is the simplest way of managing this responsibility for most of the businesses. Outsourcing it to a dedicated payroll company like eBOS will help you free up a lot of time and ensure your full compliance with the current legislation. This decision can result in taking a great weight off your shoulders since you know that your payroll is in the hands of a specialist who is preferred by a majority of growing businesses in the United Kingdom. In fact, these businesses have enough time to focus on growing their businesses because of this freedom. Communication is a big factor when choosing to outsource your payroll. You should be ready to communicate with the company on a regular basis. All you need to do is inform the payroll company whenever someone leaves the company, gets promoted, does extra hours, and when long-term absences occur. All these things can affect a person's salary. It is important that each individual gets paid the right amount at the end of each month.
Managing Payroll In House
Many small businesses prefer to manage their payroll activities in-house without outsourcing the function. The disadvantage of this procedure is the time taken for the function. You will need a highly dedicated staff assigned to oversee everything effectively. In one way, this may help reduce external expenditure. In a smaller company, a director will take care of these issues. But as your company grows, you may need a dedicated team for this purpose. Whoever is in charge of your payroll should have an up-to-date knowledge of PAYE, tax systems, NI, returns, and other forms that should be sent to HMRC. You have to inform HMRC whenever an employee joins or leaves the company. Payroll requires a lot of experience and dedication since it is a complex job. The person needs an aptitude for numbers. Hence, you need to keep this in mind when selecting a payroll manager for your business.
Digital Payroll Systems
Digital payroll systems are becoming quite popular with each passing day. These systems allow you to take a large chunk of manual labor off the equation. A good system can do the calculations based on the data you input, send returns to HMRC, produce the payslips, and print P45/60 or other forms for employees of the company. Mastering the system can be a bit tricky at the beginning. It is essential if you plan to do your payroll in-house. Digital payroll systems come as download software or in the form of an online portal which can be accessed from anywhere. If you consider a digital payroll system, you need to be wary of how the information in your payroll system is transferred to your accounting system. Will you need to input the details manually or can you find a payroll software which is compatible with the accounting system?
Keeping Up With Legislation
The biggest challenge for a business planning to run its own payroll is keeping with the constant changes in the legislation. The software packages should be updated on a regular basis to ensure all new legislation is updated. The payroll manager should keep an eye on these changes. A good payroll system should offer excellent support to its customers. If there is any technical issue preventing you from paying the employees, a specialist at the other end of the phone should be ready to answer your questions. An outsourced payroll department is always up-to-date on the latest legislation. They understand how to implement these changes in your business from day one. But if you plan to do it in-house, the heavy responsibility falls upon yourself and the designated payroll staff. If you choose to manage your own payroll, you need to be sure that it is the right choice for you. Mistakes with payroll can be quite costly most of the time. If you need more information about payroll systems or a no-obligation quote for outsourcing your payroll solutions, get in touch with eBOS right now.