Managing payroll can be one of the most complex and time-consuming tasks for any business. As your business grows, manual payroll can become increasingly challenging and error-prone. This is where payroll software comes in.
Companies that offer payroll software in the UK include:
How Does Payroll Software Work?
Payroll software keeps track of all the necessary employee details. This requires you to add information like hours worked, leave, tax details, and salary. Then, from the information you have added, it will work out how much you need to pay your employees. It will also calculate any income tax that must be deducted from their salary.
Another key feature of payroll software is real-time reporting. HMRC stipulates that it must have all of your monthly payroll information no later than you pay your employees. Your software will send the necessary information to HMRC, after which you can pay your employees.
Should I Do My Own Payroll?
Payroll is one of the most important aspects for business owners. Given its importance, a lot of businesses choose to outsource their payroll work to an accountant, which still costs a lot. If you choose to do your business’s payroll on your own, it can save you some money which you can use to grow your business. This is where payroll software comes into play.
Does My Business Need Payroll Software?
Whether you need payroll software or not depends on different things like the size of your business and the type of calculations you need to do. Signs that show your business needs payroll software include:
You’ve Hired Your First Employee
The ideal time to start using payroll software is when you hire your very first employee since it can help you organise your payroll process from the beginning. Getting payroll software once your first employee is hired can also help you meet your compliance requirements automatically as your business grows.
Above all, you could eliminate all the data transition difficulties that most businesses go through when they wait to adopt software until they have loads of employees.
You Want to Avoid Common Payroll Mistakes
If you do your payroll manually, the chances of making mistakes are bigger. Mistakes are inevitable but they can be especially costly in payroll. Payroll software can do the heavy lifting of calculating and double-checking, helping you to eliminate the mistakes that can come into your payroll.
You Want to Automate the Process
Computing payroll taxes alone can take up to 5 hours of work every payday and time is the most valuable resource, so you want to automate as many of your tasks as possible. Payroll software can automatically calculate payroll, compute tax deductions, and distribute payslips which will help you achieve complete automation with payroll.
You Want Expert Assistance At a Lower Cost
Outsourcing payroll work to an accountant can be expensive. Getting payroll software can provide you with expert assistance, just like an outsourced accountant, at a lower cost. Software vendors provide specialised customer support teams so that when something needs attention, you know that you’ve got expert help from people who understand how the system works.
You Want Better Visibility On Payroll Expenditures
Payroll software doesn’t just automate your payroll and tax calculations, it can also generate real-time reports, giving you complete visibility into your payroll costs and tax liabilities.
What Are the Advantages of Using Payroll Software?
There are many advantages of using payroll software, from saving time to increasing employee satisfaction. Here are some of the advantages of using payroll software:
Automatically Calculate Payroll Variables
Payroll management software automatically calculates the correct payroll variables like tax and annual leave. If something doesn’t look right, the software lets you know by sending a message.
Save Time
Payroll management isn’t the most exciting job in the world, but by using online payroll management software it can make their job more enjoyable and save them a significant amount of time.
That means your payroll manager will have more time for other tasks, improving your operations and reducing your costs.
Reduce Payroll Errors
Payroll software reduces repetitive data entry and helps prevent human error. Some systems allow employees to submit their bank and tax details through an employee self-service portal, which saves passing information between HR and payroll teams.
Improve Data Security
Payroll data is especially sensitive, as it contains the personal information of all your employees.
The best online payroll management software uses state-of-the-art security to protect employee privacy and company financial data from falling into the wrong hands, which might not be the case if you outsourced payroll.
What Are the Disadvantages of Using Payroll Software?
Even though there are loads of advantages when it comes to payroll software, there are still some disadvantages. The disadvantages of using payroll software include:
- Security risks.
- Potential extra costs.
- Training time.
- Compliance errors.
Is Payroll Software Expensive?
The price of payroll software varies depending on the number of employees you have and the features you want to add. However, there are many different options available to suit the needs and budgets of businesses.
