Managing payroll is a critical part of any business. However, this can be a stressful and time-consuming process, especially if you decide to handle everything in-house rather than employing a good London accountant and tax adviser. You can find yourself spending a considerable amount of time on this aspect of your business when it could be spent on other more profitable aspects. With that being said, in this post we are going to take a look at some of the top payroll tips for your business to follow in order to maximise the efficiency of this process and take the stress off your shoulders.
Keep up to date with payroll legislation – A lot of business owners who find themselves in a spot of bother do so because they are not up to date with payroll legislation. Therefore, they believe they are handling everything above board when, in fact, they are not. Regulations can change all of the time, which is why it is a good idea to keep up to date with the latest news so that you make sure you do not miss out on anything important. You do not necessarily need to know all of the changes regarding tax and benefits but if you take your eye off the ball you could end up missing something important.
Keep a running profit and loss statement – To get a good idea of your business’s monthly profit you should keep an accurate and updated profit and loss statement. This is a good way of bringing your attention to any of your costs that can be cut or reduced or that are completely unnecessary. This is also a good way of ensuring that you account for any of the current taxes that your company owes.
Purchase payroll software – Any good accountant in London will advise you to have quality software in place to speed up the process and handle things more efficiently, as you will be able to automate numerous elements of the payroll process. From the generation of payslips for employees to tax and NI calculations, you will find life a lot easier once you have effective software in place. But, remember, software is not enough on its own, which is why it is also good to take advantage of a fixed fee accountancy service, as you will discover below.
Train your employees in the software you use – There is no point in investing in payroll software if none of your employees know how to use it. You could decide to simply let them figure it out themselves, but this is extremely time-consuming, and you can be sure that your workforce will not be making the most of the system. This is why it is better to invest in a payroll software training course. A short course can make your employees more efficient and save a considerable amount of time.
Know your big deadlines – It is likely that you will have a lot of different deadlines that your business has to meet. You should prioritise the big deadlines, as this will allow you to work ahead of time to make sure that any problems do not arise. After all, if you miss a vital deadline you could find yourself facing a large fine.
Make sure you properly categorise your employees – It may sound obvious, but you need to make sure that all of your workers are categorised as either hourly or salary. This makes everything much easier to manage, especially when it comes to overtime purposes and determining whether someone is non-exempt or exempt.
Have a transparent payroll policy – It is crucial to have a transparent payroll policy in place otherwise problems can easily arise because your employees do not understand your payroll system. A lot of issues, including employee misclassifications and underpaid taxes, will be corrected if your payroll system is transparent. So, make sure your policy features information on everything from business procedures for handling payroll errors to how salaries are determined.
Have a keen eye for detail – One of the biggest mistakes people make when it comes to payroll is being lax in terms of details. This may not seem like a big deal, but it is only going to lead to issues later down the line. Thus, you need to make sure that all of your employees’ details are up to date and accurate, including everything from their dates of birth to start dates.
Have a financial plan in place – Reacting to things once they have happened is never a good formula for anything in business. You need to be prepared. So, you should keep on top of all payments, send invoices out as quickly as possible, set up a good system for credit control, and chase late payments as soon as the due date passes otherwise you could suffer a disruption to your cash flow.
Hire a chartered accountant in London – Last but not least, one of the best ways to ensure that your payroll is handled properly and efficiently is to use the services of a quality accountant in London. Not only will this free up time so you can focus on the core of your business and make more money, but you can also have the peace of mind that everything complies with the current and relevant legislation. From the administration of incentive schemes and completion of statutory forms to the administration of PAYE and customised payslips, a chartered accountant in London will be able to take care of it all.
If you follow the top tips that have been mentioned in this post, you can ensure that your business stays on top of your payroll effectively. From downloading software and training your employees to use it to having a financial plan and keeping up to date with legislation, there is a lot that needs to be considered. This is why you are advised to invest in fixed fee accountancy services. You can be sure that all of the elements mentioned in this article are taken care of while you use your time on other aspects of your business.